Victus Spiritus


Reputation is more valuable than Gold

24 Mar 2011

Early this morning I shared a short conversation with talented hacker Laurent Eschenauer* about the recent announcement of Color going live and receiving $41 million dollars of investment.
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The conversation continued...

Me: but 27 people in the co already. They must have raised and silently built up the product

Laurent: Exactly, you don't need 27 people and a senior founder team of 7 for such an app. Giving 400k to motivated kids would be enough. @VictusFate Worst piece of the story is that the reviews are bad and they launched two weeks after sxsw ??? I don't get it. #colorblind

Me: that's not a great sign, but with 40mil they can relaunch next year or the year after

Laurent: It is sending the wrong signals to young entrepreneurs, I don't think this bubble is healthy for anyone. Don't you agree ?

Me: if the 27 person, 41 mil investment makes a good return than it's a good bet. Agree that its more than I would invest. But Sequoia has different criteria for putting their large funds to work

From Jason Kincaid's coverage it's clear that the team behind the startup has a proven track record. Bill Nguyen and Peter Pham have successful exits, and DJ Patil was LinkedIn's chief scientist. There's little doubt that Venture Capital will pay a premium on experienced operators. Even if the company is delivering products that look like spin offs of other photo or group apps, it's only the beginning. Forty one million dollars buys a generous runway, even for a team of nearly 30 people. Their start is anything but lean. You can count on Color going BIG or going home.

*= I know of Laurent because of his work as architect of Onesocialweb. Mr. Eschenauer is currently busy building Comodit, a cloud services company.