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VC Kool-Aid

I have been a skeptic of venture capital involvement with podcasting companies since day one, even if day one wasn’t all that long ago. I just struggle to see venture-type ROI for most of these deals, unless they can be flipped before Yahoo, Google, etc. put down their tall glasses of content Kool-Aid. This isn’t to say that the podcasting market is inherently unprofitable, because it isn’t. VC-backed companies, however, are supposed to produce something a bit more exciting than respectable margins.

Some VCs agree with me, but it is clear that many others do not. Case in point is PodShow inc., which recently raised $15 million in Series B funding. This follows up on an $8.85 million Series A deal from last summer, from Kleiner Perkins, Sequoia Capital, Ram Shiram and Jerry Newman. All four are back this time around, but an undisclosed lead came aboard at a major pre-money valuation step-up. I know lots of firms that it isn’t – NEA, Oak, Spark, Greylock, etc. – but that is only useful if there was a narrower market of potential backers.