In downturn, don't build, hoping they'll come

Bambi Francisco Roizen · October 31, 2008 · Short URL: https://vator.tv/n/4b9

Glam Media CEO and former VC, Samir Arora, on fundraising during a downturn

Nearly one out of five mortgage borrowers in the U.S. owe more to lenders than their homes are worth, according to a recent report. That's probably the case with venture capitalists' portfolios. A good portion are worth a lot less than their original value.

Given today's tough economic environment, I asked Glam Media CEO Samir Arora, who's an entrepreneur four times over and has worked on the other side of the table as a venture capitalist, to share his thoughts on how to operate and how to go about fundraising.

Glam Media, which recently had layoffs, has raised significant amounts of money. All told, Samir's raised $110 million in funding for Glam Media, a vertical advertising network focused on women, and more recently targeting men, with its new Brash Network.

"Don’t fool yourself to thinking 'We’ll build it and they will come,'" said Samir. "Given what's going on in the market today, absolutely minimize all expenses."

Clearly, this is good advice for anyone seeking to spend resources on new or untested projects. 

As for fundraising, Samir thinks we're heading for more sobering times.

"Having seen several cycles in fundraising," he said. "We’re entering a slowdown, [we're] not even in the middle." 

To that end, venture capitalists won't be funding new ideas for a long time, he predicted. VCs have no choice but to put their money into existing companies to make sure their current investments remain solvent. So, understand that you may have a great idea and product, but it's the tough economic times that will keep it from ever being realized.

For Samir, of course, he's betting that his existing investors will heed his words and keep funding his company until there is an exit.

But just in case they don't, he's following his own advice by having reduced costs and pursuing breakeven this quarter. 

 

 
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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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Glam Media

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The founders of Glam Media created a new media model to bring brand advertisers to vertical audiences online:  vertical content networks. Today, Glam Media—with its Glam.com (women) and Brash.com (men) networks—is the fastest growing Top 10 media Web property in the U.S. with a total reach of 52.3 million unique monthly visitors in the U.S. and approximately 90 million uniques globally. Glam Media recently entered the comScore Top 10 Web properties list and is also a Top 10 Display Ad Publisher. With 700 sites total, Glam Media is composed of: Glam.com—a carefully curated network of popular and influential lifestyle women’s Web sites, blogs and magazines; and Brash.com—the newly launched all men’s network. Glam Media is backed by Hubert Burda Media, GLG Partners, Accel Partners, DAG Ventures, Draper Fisher Jurvetson, Walden Venture Capital and Information Capital. Glam Media is headquartered in New York City and Silicon Valley, California, with international offices in London, Munich, Berlin, and Tokyo.

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Samir Arora

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Glam Media's Chief Executive Officer, Founder and Chairman of the Board