Glams 1 3B Valuation Explains Why Start Ups

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Glams $1.3B Valuation Explains Why Start-Ups...

By: Andy Beal
2008-05-29

...Chase the Build Now, Add Revenue Later Model. On Tuesday, I explained why chasing the "free" start-up model was killing...

...many business ideas. How can you build a company when your business model consists of "get acquired, before we run out of funding?"

Today, we see exactly why the "get acquired" model is so attractive to start-ups. According to VentureBeat, Glam, an online publisher aimed at women, turned down an acquisition offer worth, wait for it, $1.3 billion!

"I heard today that Glam received an acquisition offer of $1.3 billion in the past few days, but is unlikely to take the offer, according a source close to the company. Glams investors are unlikely to do so because they see a bigger opportunity for Glam to build a large business for high-end display advertising, the source said."

Heres the kicker, just this February Glam raised $85 million in capital, bringing its total funding to over $100 million. Glam has yet to make a profit!!!

Sure, its selling ads, building optimized sites, and as of today, planning a new video ad network, but its reportedly yet to make a profit.

Is it any wonder that start-ups"and VC firms"are enamored with the build it first, find a business model ~~later~~ never strategy?

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Tag: Glam, Start-Ups, acquisition

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About the Author:
Andy Beal is an internet marketing consultant and considered one of the world's most respected and interactive search engine marketing experts. Andy has worked with many Fortune 1000 companies such as Motorola, CitiFinancial, Lowes, Alaska Air, DeWALT, NBC and Experian.

You can read his internet marketing blog at Marketing Pilgrim and reach him at [email protected].


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