More Musings on ActiveRain Investment
Paul Kedrosky on why HouseValues’ investment in ActiveRain is the Worst Timed Investment Ever:
Worst: Real estate is in the tank and likely to stay there for some time. Venture capitalists are atrocious market timers, and this is, if anything, a sign things are going to get worse. Further, building a social network for real estate agents is like building one for residents of a rapidly southward-drifting ice flow.
[poll=7]
Further, if $2.75 million buys a minority stake in ActiveRain, any guesses to the total valuation of the company?
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loren nason | Jan 21, 2008 | Reply
Well, I think it was reported the 2.75 million is for a 5% equity share then that value’s them at 60million
There was no undecided selection on the poll.
Maybe housevalues is looking for another revenue stream.
loren nason | Jan 21, 2008 | Reply
ok it looks like its 35% so that makes it around 9-10 million
retrove.com | Jan 22, 2008 | Reply
Maybe bad for activerain by simple association… housevalues burned alot of real estate community bridges.
Lynn | Jan 22, 2008 | Reply
“Maybe bad for activerain by simple association… housevalues burned alot of real estate community bridges.”
– Good point, Retrove.
Lenore Wilkas | Jan 22, 2008 | Reply
Ah, it might be a strategic move for housevalues to associate with activerain. It’s well known that the weaker one will gain in respect with the association of a strong and well respected company, i.e. this happens all of the time with underwriters for public broadcasting.
Jon Sigler | Feb 9, 2008 | Reply
$2.75M could be a huge ripoff and it could be a great deal as well, a minority stake could be anything short of 49% of the company.
HouseValues burned a lot of poeple, and doesn’t have the greatest reputation. ActiveRain is liquid gold for agents and has a great reputation. I hope HV doesn’t spoil a great thing.
I don’t think it was poorly timed. If ActiveRain is a good business and provides opportunity which it does, should you not make an investment and grow just because someone says the market is not at it’s peak?
CVBD | Feb 14, 2008 | Reply
Partially disagree. According to compete.com, AR is doing better than inman. Also hard to make sense of a vc’s perspective when they have never made Forbe’s Midas List (http://www.forbes.com/lists/2008/99/biz_08midas_The-Midas-List_NameProper_3.html)