Microsoft Ventures GM: “We’ve hit the peak of the bubble”

At the 2014 Cloud Factory Conference last week in Alberta, Microsoft Ventures general manager Rahul Sood warned that companies hoping to cash in quickly on a multibillion dollar acquisition in the wake of Facebook’s purchase of WhatsApp may need to re-think their strategy. As VentureBeat reported, he wasn’t criticizing Facebook’s pricey acquisition of WhatsApp as much as he was criticizing the rush of copycat companies aiming to be snapped up in the frantic Silicon Valley spending spree that followed. “You know you’re in a bubble when you see people throwing money at dogsh*t companies,” he bluntly elaborated. Sood’s primary point was that Facebook’s acquisition of Whatsapp is likely the peak of these acquisitions and going forward companies will need to position themselves smartly in order to remain attractive to potential buyers.

He later explained in a follow-up post online that he was not criticizing Facebook’s business decision, but rather warning that people should not bank simply on “investor exuberance” when it comes to building a solid foundation for a growing company. His message to investors was to avoid buying into fancy-sounding buzzwords that get thrown around so often in order to dress up an inferior product. On both sides of the negotiating table, young companies and investors alike can do themselves big favors by simply doing their homework.

Sood had altogether kinder words for cloud technology, mentioning that small companies can now accelerate growth and exit faster than ever before. He finished his follow-up post online by mentioning “if you are looking to invest, look to reputable accelerators, investors and angels.” We couldn’t agree more, which is why we are passionate about the work we do here at Broker Dealer. Sign up with us today to gain access to our incredible network of broker dealers, venture capitalists, angel investors, and more!

H/T to VentureBeat