Facebook Has Officially Popped the Start-Up Bubble

Following Facebook’s IPO we declared a bubble burst and now we’re seeing that hit the start-up ecosystem as investor money becomes harder to find. ”The frothy bubble is over,” an analyst told The Wall Street Journal’s Pui Wing Tam and Amir Efrati. And that defrothing has happened in large part because of Facebook’s performance over the last three months. It’s not just the social network’s stock that has failed to boom in the months following its public offering, fledgling tech companies are now having a hard time raising money, as a result. Rather than just fork over the bucks to an up-and-coming app, investors have a new found curiosity in potential profitability and revenue. See: investors want to put money into companies that will bring mega riches. Before, users were enough to feed those fantasies. But Facebook’s wimpy stock has since crushed that dream, making it harder for these other social media start-ups to convince investors to buy in. 

Read more. [Image: Reuters]

(via theatlantic)