Austin Ventures’ backed Shadows in Dead Pool
November 22, 2006
This morning Mike announced that he was moving Shadows, the bookmarking service, into the TechCrunch DeadPool. Ouch. Shadows is a product of Pluck based in Austin and funded by Austin Ventures. Last year we kept running into the Pluck CEO, David Panos, and by all accounts the company is now focusing on its Blogburst platform. (Mike’s picture from WSJ)
In November of last year I spoke at the University of Texas’ MBA program about the Web 2.0 space. As a follow-up I wrote a post titled “Consumating v. Pluck” comparing a small boot-strapped company (Consumating) to a well-funded venture backed company (Pluck). My point? Boot-strapped companies have a much better chance of success in the new Web 2.0 environment due to their agility ~ i.e. that didn’t work, how about this. Venture backed companies have a much harder time making course corrections. Also, the dollars required for a very successful exit are much different for both types. Consumating was able to sell to C|Net for a number that made it’s founder, Ben Brown, very happy (but far less than the capital Austin Ventures put to work in Pluck). I estimated that Pluck would need to sell for $50-100MM to create an acceptable return for Austin Ventures.
The prognosis for Pluck? It won’t be easy, but I think their focus on Blogburst is a good sign. Dump what isn’t working (i.e. Shadows) and focus on the promising stuff.
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