While economic bubbles may not be so bad, it is funny to see how quickly reports of great wealth from a bubble translate into a sudden influx of folks who don't understand a space at all, but just want to cash out. It happened during the last bubble around 1999 when all of the reports of crazy IPOs were happening, making lots of people paper millionaires (many of whom never turned that fake paper into the green kind that matters). Now, it seems that with the lack of suitable IPOs, we're going to be hearing a lot more stories about vapor millionaires. It started back in August with Business Week's silly cover story claiming that Digg's Kevin Rose had personally made $60 million which was flat out false, and now it appears that Rolling Stone is following suit. VentureBeat points us to a Rolling Stone story about "the baby billionaires of Silicon Valley." There's just one problem: none of the people they list is a billionaire. Outside of the YouTube founders (who are worth a few hundred million on paper) none of the others are even worth very much on paper. They all founded or run small private companies that have yet to be sold to anyone and there's no telling what they're worth, if anything. Some of the guys profiled are very nice guys who we've met -- and they may eventually be able to cash out with plenty of money -- but to claim they're billionaires (or even millionaires) isn't even remotely accurate. They don't even have the money on paper -- other than in this Rolling Stone article. It truly is the rise of the vapor billionaire -- and the problem is that stories like this will just send out the signal for more folks to show up planning to make their own billion, not even recognizing that the original billionaires didn't even exist in the first place.
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