Thank you so much for your post Hardknocksmba. You just made my point for me. The idea of an online venue where investors and talented entrepreneurs can interact and associate is great; however in reality the only ones that seem to profit from these matchmaking sites are usually the operators.
The problem with these sites is that most operators really don’t have the expertise and experience to put together a portfolio of quality investment opportunities that investors might be interested in. And even if they do, having to decline about 60%-70% of the proposals that aren’t up to par, would mean that they would be loosing 60%-70% of their business. Since they can’t charge a contingency fee because they are not licensed as broker dealers, this only leaves them with accepting anybody who’s willing to pay their fee.
On the other hand, those who possess the required expertise, experience, and licenses to focus on quality investment proposals, can’t really generate the necessary deal flow to maintain the interest of hundreds or thousands of investors.
So, from an investor’s point of view these sites offer literally zero benefits.
Other than that I agree with ConsultNow that social networking is facing imminent consolidation. The initial hype is over and while many sites are still extremely popular, they are also struggling to come up with a viable strategy to turn their popularity into revenues.
So unless, the dynamics of your business or social networking niche is substantially different from mainstream Web 2.0, arranging financing will probably not as easy as you want it to be. If you can, try capitalizing on your site’s popularity and focus on an internal growth plan.
I hope this helps.
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