Why Blog Networks Can Easily Get Investment Money

July 16, 2007 – 7:10 am

by Darren

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I’ve had a number of spontaneous offers from potential investors lately, despite the fact that I’ve never solicited for one. I happened to mention this to a friend of mine, who’s made millions investing in tech companies. He had a simple explanation that I really liked. He said “People love investing in companies they don’t understand.” And I realized it’s very true. Take, for instance, Google.

When you look at Google you realize very few of the investors in the company know exactly what they do for to make their money. What they do know, though, is that the company is run by smart people who are doing smart things to make money. And a large number of people are interested in investing in Internet companies, because they do represent a superior way to make money, especially as compared to similar dollars put into an offline investment.

I guess they realize something obvious: an internet business is completely scalable, and can grow large without huge sums of capital. In that way a relatively small investment can be sold “up the chain” to even bigger investment firms, which is what ends up happening to most of the scalable solutions. Even if your company isn’t scalable, it still should be profitable enough based on your cost structure to attract people looking for a decent return.

I’ve never taken on outside investors, but lately I’ve been mulling over the idea quite a bit. There are huge opportunities online that can be exploited easily enough.

Have you thought of getting investors to grow your online business? What was your experience?

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    1. One Response to “Why Blog Networks Can Easily Get Investment Money”

    2. That extra investment cash would be very helpful in allowing me to focus my time on pushing the plan forwards instead of having a day job!

      By Gary on Jul 17, 2007

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