Bubble Blown - Whatever happened to the "RSS" venture capital fund
As part of what I call The Sign Of The Bubble, I've been interested in what happened to a venture capital fund which wanted to invest $100 million dollars based on "RSS" (syndication feed) businesses, started by two people at Harvard's Berkman Center. It raises many issues that I shouldn't elaborate on in a public message. But I was never able to figure out how to ask the questions I wanted to ask, in a context and manner that might have gleaned candid answers. And it didn't seem worthwhile to annoy people over the issue (both in asking sensitive questions, and in possibly writing about it).
But the peHUB site ("A Public Forum for Private Equity") now has a short article on it: RSS Is Dead, So Is The RSS Fund. Key points:
The firm launched with a press release touting "the creation of a $100 million fund," but that was basically a PR stunt. ... [they] wanted to raise $100 million, but had only $20 million from a cornerstone
The firm made a series of investments, in companies like Attensa, KnowNow (defunct) and Edgeio (assets sold to Vast.com). But new deals stopped when RSS Investors ran out of cash, and the decision was made to close up shop.
I'm not sure what the moral of the story is, beyond the obvious that the attempt to make 100 million dollars justifies every cynical thought I've ever had or written regarding blog-evangelism and the huckstering which drives it. I suppose a more politically astute person than me could have sold them some snake-oil and cheerleaded all the way to the bank ("Oh yes, RSS is a world-changer, people can write *blogs*, so buy my data-mining start-up ..."). But as we see, that game doesn't work well even for the players (though still much better for them than all the digital-sharecroppers).
By Seth Finkelstein | posted in cyberblather | on September 03, 2009 11:59 PM (Infothought permalink)
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And here am I, working without a penny of that $100,000,000 investment fund, on a means of enabling readers to pay bloggers a penny for each item that appears in their RSS feed (1p2U.com).
The moral of the story is that RSS Fund founders John Palfrey, Jim Moore, Richard Fishman, and Steve Smith and Tom Crowley were just bullshitting when they told the world they had a $100 million investment fund.
This is worth keeping in mind the next time Palfrey and the others make grandiose claims about a tech venture they're involved in.
My guess is that it's accepted practice in the VC world to tell people you have the money you wish you had, as opposed to your actual bank balance.
I just started a $200 million investment fund. We just made a series of investments in Marvel and DC comics, along with whatever company makes the plastic bags and backing boards to hold them in. Wish us luck.