With so much buzz going on around the idea of a new bubble, some people are trying to figure out what it all means, and how it will shake out. While some VCs are distancing themselves from the situation by claiming this time it's an entrepreneur-created bubble instead of a VC-funded bubble, that's not exactly true. It takes some of both for the bubble to occur. While the complaint is that so many of these companies are built to flip rather than to be sustainable businesses, some are noticing that this process is really just a better way for some to stand out and get a job. You build a company quickly and cheaply that gets some attention, and a bigger company comes along to scoop up your company, giving you a nice "signing bonus." In effect, the purpose of these companies is to act as a strong resume to stand out from the crowd. And, as we've pointed out before bubbles can be quite good for innovation, in that it helps to get a lot of ideas tested really quickly. However, what will be interesting is to see whether or not the model starts to break down when some of these "built to flip" companies start believing they actually have more solid business models than reality would suggest. With so much VC money swarming, that's certainly a risk. It's a lot harder to flip a built to flip company if it's taken too much money.
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