The Rise And Fall Of The Big Telecom, Networking Startups
from the less-publicity,-more-money dept
While the consumer-focused Webvans and Pets.com failures got all of the interest as the dot com bubble popped, a lot more money went into a number of telecom and networking startups that actually could make more reasonable claims for needing large capital investments to get their business plans on track. However, despite all that money, they’ve mostly struggled. The San Jose Mercury News looks at the “big 10” of networking and telecom startups that all raised upwards of $150 million in venture capital during the boom years. Most are mere shells of what they once were, with a good percentage filing for bankruptcy at some point. While some are still trying to turn whatever cash they have left over into a viable business plan, many don’t look long for this world. Of course, all of this is part of the risk of venture investing. Not every investment is going to be a success, and plenty will end up as complete failures. The only thing here, was that many of these companies clearly had half-baked business plans. But, in the go-go boom years, many VCs were falling all over themselves to invest in companies that had “buzz”. Also, with so much money invested, I’d bet that these companies weren’t the most conservative in setting up their plans, and thus, were slower to react when reality set in.