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  • It’s the year 2000 and The Dot-com Bubble has just arrived. I was 11 years old at the time. I don’t remember it. What I do remember is playing Chess on Yahoo! Games or chatting with friends on AIM. Those were the good ol days.

    However, researching The Dot-com Bubble has been eye-opening. Two major factors catalyzed the conflagration of sell-offs, bankruptcy and failure of so many e-companies (as they were called then). Those startups (as we call them now), were plagued with:

    1. A crazy amount of over-spending. [1]
    2. The stock market crash that followed the 9/11 attacks.

    9/11 was unavoidable for those businesses. But overspending, or burning cash was a very serious problem then — and remains a serious problem now. Snapchat lost almost half a billion dollars in 2016. Uber spent $2.6 billion in 2016 alone. Apple, the prodigal son spent $10 billion on R&D in 2016. The tide is pulling back for some of these VC-backed companies, and there may be a tsunami looming around the corner.

    Enter, the holding company.

    Holding companies reduce the risk for owners. If a financial hardship comes for one of the holdings, it’s unlikely the business will disappear as the corporate group as a whole owns a stake. This is a healthy relationship, and strengthens the bonds between business and consumers.

    Tiny's Homepage

    Recently I came across Tiny. Tiny invests in internet startups, but it also buys businesses into their holdings. If you’re a bootstrapped company, struggling to grow under your own weight, or can scale to level that your VC’s want — Tiny will make you an offer (within 7 days no less).

    Their portfolio is very impressive.

    Dribbble, Crew, Designer News, Need/Want, and Buffer are just a few of their holdings. Tiny won’t flip the business, and they won’t come in and micro-manage team culture. These internet businesses are thriving — each one isn’t an Uber-sized goliath, but they come together in harmony. Each one working as hard as the next, producing a quality cluster of nodes for the web. Each one producing jobs, solving problems and existing through lean years and fat years. Even The Walt Disney Company has an immense amount of holdings and assets, which to say the least… is smart.

    If another (VC catalyzed) bubble is coming, and it most certainly will… I believe most of the businesses (if not all) within Tiny will survive. As overspending becomes more and more entrenched, it’s going to get rough out there. Minimizing the next bubble fallout means taking action.

    Holding companies can make the web a healthier place. Less link rot. Less bullshitery like what happened to Vine. No more dead projects like FFFFOUND, RIP.

    Maybe I’m paranoid, buy if you’re not standing underneath the umbrella of a holding company, I’d be worried about survival.