For a video-sharing site known as 5min, there’s good news and bad news. The good: it just brought in $5 million through a round of funding. The bad: about half of it is now owned by investors.
There isn’t much of a cause-and-effect relationship between those two things, though; the loss was actually caused by a previous group of angel investors. Michael Arrington writes, “An Israeli (print) magazine called Globes recently got their hands on the capitalization table of 5min and published the details. The angels ended up with nearly half the company for that $300k, leaving the three founders . . . and all other employees to split the rest.”
Google bought YouTube for $1.65 billion last October, and more recently, Microsoft gave $240 million for 1.6 percent of Facebook. In contrast, $300,000 for half of 5min seems rather unfair. The fresh $5 million should act as something of a picker-upper, however, and the company’s founders have a couple of other things to be happy about, as well.
First up is the traffic to 5min.com; Frostfirebuzz.com analyzed data from Compete, and the number of people visiting 5min increased by almost 60 percent in the last measurable month. Also, it appears that the growth (which just started recently) isn’t anywhere close to leveling off.
5min’s founders should also take pride in their product – as opposed to being yet another YouTube clone, 5min tends to focus on skill-teaching and question-answering instructional videos. It’s more of a resource than a place to watch people get kicked in the crotch. But only time will tell if these positive attributes can bring in more than $5 million the next time around.
