{"id":896,"date":"2012-04-18T01:13:56","date_gmt":"2012-04-18T09:13:56","guid":{"rendered":"http:\/\/www.cultofmoney.com\/?p=896"},"modified":"2012-04-17T21:24:22","modified_gmt":"2012-04-18T05:24:22","slug":"venture-capital-investments-for-blogs","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/venture-capital-investments-for-blogs\/","title":{"rendered":"Venture capital investments for blogs"},"content":{"rendered":"
\"Venture<\/a>
Venture capital (VC) money for blogs? What is your's worth?<\/figcaption><\/figure>\n

So reading recently of individuals looking to either sell or purchase blogs got me thinking about is there an investment opportunity in the blogosphere?\u00a0 If there is an opportunity for venture capital (VC) to invest in blogs and help them grow?\u00a0 If so, what is the return on investment (ROI) and what is the exit?\u00a0 How could you evaluate potential investments?\u00a0 Let\u2019s talk about this.<\/p>\n

ROI and getting out<\/h3>\n

So the first question a venture capitalist (VC) will ask is what is my return, and how do I get paid?\u00a0 Given that it seems difficult to know which blogs or bloggers will be runaway hits from the beginning, I would think that the returns would have to be fairly large to entice venture capital money.\u00a0 The odds of the homerun investment would likely cause the terms of any investment to be somewhat draconian.\u00a0 With the exception of some fairly large and well known blogs that were able to get buy-out offers (such as Get Rich Slowly) most of the blogs would probably be cash flow properties at best and simple failures otherwise.\u00a0 Even the cash flow sites would be of varying quality and income.\u00a0 So this seems to be the way a VC would get their money out.\u00a0 Given the limited returns and fewer buy-out opportunities, a true VC likely wouldn\u2019t be interested, and certainly not in individual blogs, as there simply isn\u2019t enough opportunity for investment on a dollar basis.\u00a0 So any investment would need to be along the lines of an angle investor, a partnership or cash flow investor.<\/p>\n

\"Are<\/a>
Are you burning money or printing money by investing in a blog?<\/figcaption><\/figure>\n

Evaluation of potential investments<\/h3>\n

So how would you evaluate what makes a good blog investment and what doesn\u2019t?\u00a0\u00a0\u00a0 Is there a page view or visitor growth rate or other metrics that could tell you how a site was performing and what type of income it could produce?\u00a0 What about search ranks on certain terms or Alexa rankings?\u00a0 Given the differences in monetizing opportunities vary by the type of blog, some page views for a credit card blog, would probably return more than the same number on a video game blog.\u00a0 So the evaluation seems difficult, but there are a bunch of metrics and data available, and with enough history for both successful and unsuccessful blogs, trends and rules of thumb could likely be developed.<\/p>\n

So how and what would you be funding with an investment in a blog or blogger?<\/h3>\n

Many VCs like to see tiered investments, only releasing funding as certain milestones are met.\u00a0 For example, one you have 1,000 unique visitors a day for a week, we\u2019ll release the next $10,000.\u00a0 Given the metrics we mentioned above, tiered investments seem fairly easy to put together, and would allow milestones and progress to dictate funding releases.\u00a0 But what exactly would you as the investor be funding, and what are the terms?\u00a0 There are a number of potential funding methodologies that could take place, including:<\/p>\n