Mark Coker, a Silicon Valley insider and founder of Smashwords, an ebook publisher, has this to say about publishing using the terms venture capitalism instead:
Many entrepreneurs who’ve sold their souls to a VC view VCs with equal parts admiration and contempt. Key positives: VCs offer access to capital, advisors and connections that can maximize their odds of getting their company out there. Key negatives: The VCs make promises they often can’t keep (such as “spend our money quickly, we’ll be here to give you more when you need it”); their allegiance is fleeting (VCs are legend for losing interest at the first signs of hardship); and their interests aren’t necessarily aligned with those of the entrepreneur.
You’ll want to read the rest of the article.
It’s worth it.
Like drunken lemmings waving fists of cash, they compete against one another to fund similar startups in the same category.
This is the key for me. Because it applies to two things that the publishing industry does that drive me crazy: 1) oversaturation of the market when they bandwagon onto a hot trend, and 2) the insane bidding that arises for what someone perceives will be anticipated books. How many vampire, shifter, demon, angel, zombie, etc. series can the market bear? How much will Niffenegger’s second book actually earn for publishers, and how long will it take to earn out that $5 million price tag? How much for memoirs of someone whose five minutes of fame were really four minutes too long?