How Much Does It Cost To Set Up A Podcasting Operation?

from the can-someone-do-the-bubble-podcast? dept

There’s something weird going on in the world of venture capital these days. The VCs still have a ton of money to invest — much of it left over from the huge funds they raised during the last bubble, but which they have been sitting on. However, those funds need to be invested quickly, as those funds have limited shelf lives, and much of that cash is getting close to the “sell by” date. At the same time, though, thanks to a variety of factors the process of starting a company now requires much less money — meaning that many startups are figuring out how to bootstrap themselves pretty far down the path. That means that plenty of hot startups aren’t looking for VCs (though, in some cases the VCs are browbeating startups into taking funding). So, when they find a “hot” property that’s interested, they seem to be pouring in all sorts of money. The latest is Adam Curry’s Podshow, taking nearly $9 million from Kleiner Perkins and Sequoia (more details). No matter how you feel about podcasts — from horribly overhyped to the next great communications medium — it’s hard to see how any company in the space needs that much cash today. John Doerr has said he’s interested in podcasting in the past — so it’s not entirely surprising that he’d be involved in such an investment. However, it’s difficult to figure out what a company like Podshow could possibly do productively with $9 million at this stage of its development. If anything, it seems likely to create a situation (as with many bubble-era companies) where the money is more of a problem than a useful resource. Having so much unnecessary cash can make a company lazy and less careful with how it’s competing. Meanwhile, the leaner competition will continue to be hungrier about opportunities. Maybe Podshow will be an exception, but the need for so much cash just isn’t clear at this point. Update: Lemmings? Who said anything about anything about VCs being lemmings who all invest in similar projects at the same time? Turns out that Odeo has announced a funding round today as well — though, they don’t say how much. From the names involved, it’s likely to be a bit less.

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