I must say it?s been some time I haven?t seen such a hype in start-up investing. Here in Poland where the crisis did not hit so dramatically and the country is enjoying its enduring GDP growth, we see strong investment rebound. It is ocuring not only on the corporate side but amazingly at start-up level as well. 

Last few weeks I have been approached by groupon clones, eg gruper.pl, fastdeals.pl. Not only their valuations were quite high (call price 1 mln EUR for 20% stake) given their few months existence, but also time window they claimed to close investment rounds sounds astonishing. It sound pretty hypey for me! Imagine companies that owns only a web page, which creation took them two to three weeks, that are copying common groupon business model, that are doing it all concurrently, that do not have any market position nor connections and that do not have any traffic nor revenues, CALL for 5 mln EUR valuation (post money). And I have never seen such exact copies of US web pages before.

I?m an old school guy. I believe in being first, I believe in good business models, I believe in competition and creating barriers for them to entry, I believe in hard work and return. I don?t see any of them here. 

I believe there are better ways of monetizing the coupon and discount business model instead of creating a web page. So far there are three major models (1) buying clubs (eg buyVIP), (2) aggregators (nextjump), (3) groupsons. For sure the third one is the easiest to build, but will be the most likely to last, I doubt it.

At IIF we are considering this market segment very seriously, so if you are doing something in this area please get in touch with us.