Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Entry archive:

Screen grab from the Pinterest website.
Screen grab from the Pinterest website.

Small Business Briefing

The $1-billion startup club gets crowded Add to ...

The latest news and information for entrepreneurs from across the web universe, brought to you by the Report on Small Business team. Follow us on Twitter @GlobeSmallBiz. Download our app here.

Valued at $1-billion? Join the club

At least 20 U.S.-based companies backed by venture capital are valued at $1 billion (U.S.) or more, The Wall Street Journal reports.

Online scrapbooking site Pinterest is the latest example. The startup raised $100-million this week at a $1.5 billion valuation, despite little revenue and no profit. During the dot.com bubble of the late '90s, 18 startups were in the $1-billion price tag club, an analysis by Dow Jones VentureSource reveals.

Facebook, which has just become a publicly traded company, is now valued at $100 billion and it is no longer in the startup arena. But the Dow Jones list include a number of "high-flying web players," including file-sharing firm Dropbox Inc., room-rental provider Airbnb Inc., e-commerce platform business Rearden Commerce Inc., and software maker Workday Inc.

Speaking of Facebook, the big business story of the moment, the valuation boom is being driven by investors looking for the next big hit and, the Journal points out, "a belief that this time it's different with the new generation of web companies." Many of the startups actually have strong growth prospects, and social media and mobile technologies are delivering huge customer bases.

But it's still a case of buyer beware. Who knows how many of these companies will ultimately deliver major profits. "In the dot-com bubble," the Journal story adds, "many billion-dollar companies, such as online grocer Webvan and online toy seller eToys, famously flamed out."

The CEO of Evernote, Phil Libin, remains optimistic. "I don't care whether there's a bubble or not," he says.

"What we want is to make sure we're isolated from market forces and bubble dynamics and that we've got the resources to get through it."

Sometimes a fat cheque wears thin

At a time when early-stage ventures thirst for capital, particularly in Canada, it may seem counterintuitive to suggest a startup should be wary of a nice fat cheque, Leo Valiquette writes on the Francis Moran & Associates website. When a company has taken a lean and frugal approach to market, he explains, a sudden windfall of cash can have several negative consequences. Mr. Valiquette cites the example of a venture he calls BigContent, which wasn't in need of outside financing, but had a Big Name VC come calling. The company's founders revamped their business plan to reflect the addition of external financing and to attempt to accelerate the process and make a bigger, bolder launch. But after several months of song and dance, the VCs said a polite no thank you, moved on, and the damage was done. The business plan no longer worked. It's another case of buyer beware.

The ultimate cheat sheet, now in progress

Slate.com has been asking its readers since May 1 to help it create the ultimate small-business cheat sheet: the 10 best pieces of advice for aspiring entrepreneurs. ( How do you start a small business that works?) Halfway through the month-long project, it points out it has received dozens of proposals, from the hopeful and idealistic (“passion is the key”) to the gleefully cynical (“steal”). It has now published some of the best tips it's seen so far and, of course, it's reiterating the call for more. It plans to narrow the Top 10 list down after the voting ends on May 26.


One application covers two awards

Nominations are now open for the FuEL Awards and the CYBF Chairman’s Awards for Best Business, both of which "celebrate the successes of young Canadian entrepreneurs, identify role models for progressive business management and inspire youth to make entrepreneurship their No. 1 career choice." The FuEL Awards are open to business owners under 30, and any CYBF program recipient prior to June 30, 2012, is eligible to enter the Chairman’s Awards. One application covers both programs.

VISION conference pours on liquid content

The B.C. chapter of the American Marketing Assocation (BCAMA) holds its annual flagship marketing conference, VISION, on May 23 at Vancouver's Westin Bayshore Hotel. A host of presenters will speak about 'liquid content' and how it is reshaping the marketing landscape. "The rate at which people consume information is growing exponentially," says VISION director Lindsay Smith. "Because of this, people are filtering and engaging with brand messages far differently than they did 10, or even five years ago." Click here for registration, cost and other details.


Longboard maker rides online solution

When marketing and sales manager Les Robertson tried to co-ordinate Rayne Longboards' bulk buys over Facebook, it just didn’t work. The platform doesn’t allow for timely, open interaction between people who aren’t already friends, so Mr. Robertson couldn’t support far-flung customer groups. He needed a new online solution to make his sale a success, offer improved service and protect Rayne’s reputation, the subject of our latest case study.


Build your own skateboard

In a video from our series called Inside Jobs, Ted Hunter and Norah Jackson outline the motivation, the design and the benefits of custom decks made by their Roarockit Skateboard Co.

Got a tip on news, events or other timely information related to the small-business community? E-mail us at smallbusiness@globeandmail.com

Join The Globe’s Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT

Our free weekly newsletter is now available. Every Friday a team of editors selects the top picks from our blog posts, features, multimedia and columnists, and delivers them to your inbox. If you have registered for The Globe's website, you can sign up here. Click on the Small Business Briefing checkbox and hit 'save changes.' If you need to register for the site, click here.


In the know

Most popular videos »


More from The Globe and Mail

Most popular