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Last week it was announced that PodShow has secured 15 million in funding. So what I want to know is where are all the Australian investors?
Sure PodShow is a large podcasting network who report themselves to have over 1000 shows. They have been there …

Last week it was announced that PodShow has secured 15 million in funding. So what I want to know is where are all the Australian investors?
Sure PodShow is a large podcasting network who report themselves to have over 1000 shows. They have been there …

Drama, that was an interesting post. I would say, however, that podcasting has created a ton of buzz, and in relative terms raising 23 million in a 24-month period pales next to that raised by other Internet-related properties.

Having said that, Podshow must have set most of that aside in a huge war chest. That or they’re spending it carelessly, because podshow.com doesn’t have that million-dollar-site look.

So my question is, how many more peope will be in that catagory after this 15m is spent? It had better be more than 60.

Adam Curry is a good marketing tool but that is not enough.

It also seems that Podshow using shady business practices and ripping off 1a podcasters.

Main problem with Curry’s “adcast” is that he is mixing advertising and content - that is against any rule and even illegal in some countries.

yeah…podNAAAtion…

btw, why didn’t they just buy the teenage girl’s podcast site…way better.

You would hope that with the advertisers and partners they’ve signed up, they’d have decent revenues that could at least partially fund their plans. Unless, of course, they’ve discounted these deals so significantly just to get big names involved in an effort to lure in investors and a possible acquirer. It makes a lot of sense to bend over backwards to get a big deal or two in the beginning, but if they aren’t generating significant revenues after getting 35-40 global brands to advertise and deals with Sirius Satellite Radio, AOL and BT, then there’s a problem here. Seems that might be the case if they’ve gone through $8.85 million and are now taking another $15. After all, if you discount your value to too many companies, the perceived value of your service in the industry drops and you’re left with no other companies to get major deals with. And with growing competition, expect pricing pressures that could cut into margins considerably.

“I have a hard time believing that the fund would invest in Podshow, and that Podshow would take the money, without some good information regarding the company’s plan to become a substantial media player.”

This is a little naive Marshall:

- Every startup a VC funds has big plans. Traditional VCs don’t fund things that they don’t believe have huge market opportunities. But plans are just that: plans. Most startups that project hundreds of millions or billions of dollars in revenue never achieve this. PodShow may see itself as the next generation media company, but so does everybody else in the space. In Bubble 1.0, VCs bet billions on companies that didn’t go anywhere. So inferring that they must be onto something because some VC is willing to throw money at them is not a predictor of success. In fact, some analysis shows that the startups receiving the most funding are the most likely to flop. Overcapitalization often leads to organizational bloat, overspending/lack of cost controls, etc.

- Valuations are based primarily on where a business is at the current time, not on speculation on where it could be in a few years. Obviously, we don’t know a lot about PodShow’s business (revenue numbers are unknown), but unless the VCs control most of the company, the valuation here looks out of whack. Valuation is everything to a business. VCs are looking for a certain return, and if you (as a founder) take on too much money, you may destroy your exit strategy. Taking massive funding and pushing your valuation too high can mean the difference between cashing out early for $50 million (making the founders very happy) or getting stuck in a situation where your exit opportunity is at a lower valuation than your investors bought into. If they control the company (in terms of voting power, or buy-sell agreements), you may not be able to sell, even though it would make you very happy.

As an example of this, I think a lot of Facebook’s woes lately are driven by the fact that they pushed their valuation so high that they now need to make moves to justify it. Hopefully for their sake, Yahoo will be dumb enough to buy them, but look at it this way: Facebook reportedly took on ~$25 million at at $500 million valuation instead of accepting Viacom’s $750 million offer. It’s rumored that Mark Zuckerberg owned 50% before that round was raised and he now reportedly owns around 30%. If these numbers are accurate and Yahoo buys them for $900 million, his decision cost him $75 million, and clearly his initial investors would have been a lot better off taking the Viacom offer too.

So my take on PodShow is that there could be something here, but a lot of questions remain. Why is this much money required? Where is it going? Where did the first $8.85 million go? How big is the “podcasting market” really going to be? Are companies like this really needed? What is their competitive advantage?

I have a personal interest in podcasting and so Podshow’s recent $15M B-round definitely raised my eyebrows. Assuming that purchase was for 20% of the company, that’s pegging their valuation at about $75M. That implies that they think the…

That aside, though, what are they going to do with $15 million? According to what Curry said a while back, they were hiring new people and didn’t have to worry about it because their revenue allowed them to do so. I am somewhat intrigued by their push into the home and mobile market, though. Isn’t podcasting mobile anyway? And can’t it be played by every mp3 capable mobile device by default as well? And can’t I listen to their content at home already?

I’ll bet they’ve got really sweet offices.

This “pod” and “podcast” copyright nonsense by Apple is going to get real ugly very soon.