VCs Picky About Mobile Apps, But Still Willing To Take Chances

While investors in mobile applications are getting pickier when it comes to backing companies in crowded sectors, some of the top firms in Silicon Valley are still willing to take a chance and invest in a potential game-changer even if it has no traction and no users.

This was a takeaway message from Sequoia Capital, Accel Partners and Kleiner Perkins Caufield & Byers at the AppNation conference in San Francisco on Tuesday. All three firms have recently put money behind app makers who have come to them with an idea – and not too much else.

“It’s getting Darwinian out there. The bar is rising,” said Matt Murphy, a partner at Kleiner, as he talked about why his firm has gotten choosier when it comes to backing mobile game companies, check-in companies or other start-ups working in hot areas.

A “me-too company” – or one that aims to follow in the footsteps of a Zynga Inc. or a Foursquare Inc. – needs to show real numbers, in terms of users and revenue, to catch investors’ attention, Murphy said.

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