:: The Second Wave ::

Of all the interesting financial things that going around there is one phenomena worth noting as it is going to dominate the next six months. I call it "The Second Wave".

The first wave is upon us now, triggered by what happened in March and April 2000. It caused any company without a proven market or extremely attractive products to go broke. It caused anything without sufficient cash to die. It caused any under performer, private or public, to take the heat.

The first wave is a rational reaction to dreams too big and hopes to high. It was bound to happen, so it is not that interesting.

The second wave is different.

From June to December the Wadi adopted a new model. A big money model. Partly due to the bigger funds that roam the Wadi, and partly due to the understanding that cash was critical, rounds got bigger. Much bigger. Seed rounds of $5M, First Rounds of $15M, Seconds Rounds of $30M.

As if money can change everything.

And those are going to hit the shore in the coming months. This time it is going to be an irrational phenomena caused by egos to big who played on a field too small.

I have a list of about ten Wadi names I can easily think of. But I'll give those companies a break. I'll just illustrate with one I already stated my opinion on. Think RichFX. Selling to customers wasn't a business model, but selling software to e-stores is just because the company has over $30M in cash?

Come on.

Are you ready for the second wave?

Wadi Writer #1 (Gray )

WadiList@mail.com