Wait, explain? Why should VC's fund something they don't think will make enough money? That seems to be a sense of entitlement - clearly, paid users were not enough to support this product on its own (which by all accounts, is a shame).
I think his implication was that paid users would have been enough to support it in the long run if the goal of investment were a stable business with some amount of yearly profits rather than a VC jackpot valuation exit.
But why on earth should VC's fund it in that case? Isn't that an entrepreneur's decision, not the VC's? Blaming the VC's for not funding this seems ridiculous to me.
To be honest, I've never heard of traditional sources of capital funding websites but I suppose that doesn't mean it doesn't happen.
In any case, I agree that it doesn't match the VC models, but I'm not sure there is another model available to a web business that can probably get enough traction to survive, but not enough to offer massive returns.
In fact, I'd go so far as to say there are probably significant market segments not being served because they offer a modicum of stable profit but have large up front costs without a lot of growth opportunity.
I wonder if this is an opportunity -- the world is not solely composed of moon-shot local social enterprise websites, and worthy businesses are being shut out of the world of cheap money by the prevailing culture. Hmm.
