There's an interesting post over at VentureBeat today about RockYou. Matt Marshall writes:
RockYou, the fast-growing online widget company — that lets you post images and slideshows in social networks and other web sites — has apparently hit a major juncture in its decision to raise funding or not. And I’m wondering if it may have decided to go a different route.
He goes on to speculate that RockYou may be considering an exit sooner rather than later, rather than raise big money at a high valuation, in the process continuing its valuation arms race with Slide.
Having the option of raising a massive round at a high valuation probably sounds pretty good to most entrepreneurs. However, as Marshall points out, doing so can put immense pressure on a company to achieve massive scale. Once a company takes a round at a stratospheric valuation, it ratchets up the exit expectations for the company to daunting levels.
The post appears to be entirely speculative - most of it is based off of an unnamed source at RockYou saying that the company had decided to go in another direction (than fund raising).
One thing is for sure - high profile widget companies such as Clearspring, Slide, Musestorm, and Sprout seem to be battening down the hatches for a long run and / or a down market by raising money now. RockYou has been silent to date.
