I am not an expert either, but I may be able to comment on a few things.
> Also many new and unproven companies raise amazing amounts of money, for, at least seen from the outside, downright silly business proposals (share your credit card expenses, anyone?).
Judging by the current climate in SV, I can safely say that silly businesses are not still not really getting funded. Blippy for example was forced to pivot. Investors are still looking for businesses that are either going to make lots of money now, or engage lots of people and make lots of money later. Many people outside SV scoff at the 2nd clause, but with 1B people online and 3B cellphones in the world, and instant distribution channels like the App Store, it's not so absurd. Just as a general rule, if you see something seemingly stupid get funded, they probably have something else going for them -- crazy traction, awesome customers, or past entrepreneurs as founders.
> Apart from the valuations...taking huge amounts of money "off the table" in subsequent funding rounds.
It's true that a huge amount of the raised money went to the execs, but that stock was sold, at the established price, by the "executive officers, directors or promoters" in question - one could argue, [as Andrew Mason himself does](http://www.businessinsider.com/groupon-ceo-andrew-mason-tell...), that it was an intentional way to get early liquidity. Obviously that price has now gone up; it was their choice to sell. Founders often argue that raking back is a good thing because it prevents people from needing to sell perfectly good businesses to get liquidity. Just playing devil's advocate.
Comments
I am not an expert either, but I may be able to comment on a few things.
> Also many new and unproven companies raise amazing amounts of money, for, at least seen from the outside, downright silly business proposals (share your credit card expenses, anyone?).
Judging by the current climate in SV, I can safely say that silly businesses are not still not really getting funded. Blippy for example was forced to pivot. Investors are still looking for businesses that are either going to make lots of money now, or engage lots of people and make lots of money later. Many people outside SV scoff at the 2nd clause, but with 1B people online and 3B cellphones in the world, and instant distribution channels like the App Store, it's not so absurd. Just as a general rule, if you see something seemingly stupid get funded, they probably have something else going for them -- crazy traction, awesome customers, or past entrepreneurs as founders.
> Apart from the valuations...taking huge amounts of money "off the table" in subsequent funding rounds.
It's true that a huge amount of the raised money went to the execs, but that stock was sold, at the established price, by the "executive officers, directors or promoters" in question - one could argue, [as Andrew Mason himself does](http://www.businessinsider.com/groupon-ceo-andrew-mason-tell...), that it was an intentional way to get early liquidity. Obviously that price has now gone up; it was their choice to sell. Founders often argue that raking back is a good thing because it prevents people from needing to sell perfectly good businesses to get liquidity. Just playing devil's advocate.