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Ad-Supported Startups, Unrealistic Expectations

There's a whole lot of hot air underneath the hefty investments propping up many of today's ad-supported startups. Most of the people financing these ventures struck it rich with technology companies and have no operational media or advertising sales experience.

Ad sales aren't some figure you can easily calculate using a model. Unfortunately, HipMojo explains, sales people only get respect "reluctantly," which is why VCs often gloss over the process and come away with unrealistic expectations.

"It's a bit scary that so much money goes into ad-supported (intended) companies based on false assumptions," the site says, adding that VCs ought to spend more time on the front lines talking to advertisers and marketers about what they think of their expectations.

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