A few years ago, it seemed like any media company with a hip New York City address and the right story could raised eyewatering amounts of venture capital funding.
Working at the time at a media company that didn’t raise VC, I was jealous of our rivals during this period. They shot ahead of us in terms of hires and traffic, and I wanted a taste of that sweet investor money to allow us to compete on equal terms.
These days, not taking VC was clearly the wisest move. The recent layoffs at VC-funded media companies reflect the fact they have failed to find a sustainable business model with all that cash.
It was never a secret that media companies generally don’t generate the kinds of return on investment VCs look for. The whole thing was a mirage. Media companies needed cash for their chance at becoming the next Disney or News Corp. VCs were looking for big, bold bets. Common sense went out the window in the face of too much money.
That’s why it’s exasperating to see The Information’s report
that Vice Media is looking to raise an additional $200m on top for the $1.4 BILLION it’s already raised. The company reportedly hopes to be profitable within a year. It’s hard not to roll your eyes and say “really?”
Why would you run a media company like a tech company anyway?
Now, Vice has a new CEO who is focused on getting the company into shape. She’s already laid off 10% of the workforce, but it’s hard to see how taking on more investment will save the struggling company in the current climate.
The shakeout in online media isn’t over yet, and most of all I feel sorry for the journalists and other creatives facing uncertain futures.