In San Francisco cafes and bars, even on the street, I overhear people talking about their startup ideas, business plans, and goals. And there are tons of incubators, Angels, wannabe Angels, VC firms, making investments in startups.

And there's lots of money being made, especially among the Super Angels, the incubators such as Y Combinator, the micro-VCs, and people such as Jeff Clavier, Dave McClure, who have made fortunes selling startups to larger companies. Sometimes startup teams can go from seed to exit in under a year.

For the investors, making dozens of $10K to $25K seed investments, can be tremendously lucrative.

Just one $25 million payday from the sale of a startup will more than cover an Angel investor's loss from a hundred dud $25K investments - which is a loss of just $2.5 million. The risk to reward ratios are off the charts, which is why so many want to be Angels.

And there's no shortage of startups looking for seed investments. They are told that they must have a business plan, they must address market opportunities of at least $1 billion in revenues; industry sector expertise is important; do the team members have prior experience? Are there enough tech leads in the team?

We are repeatedly told that these, and many other factors, are important to investors.

But aren't most of those "factors" BS? Take a look:

The plan is to sell these tiny businesses to larger companies in the shortest time possible.

But in the vast majority of cases, the buyers aren't interested in the startup's business, they are acquired for their engineering talent alone.

For example, this morning Seattle-based Geekwire announced an exclusive story:

Amazon buys TeachStreet

Amazon.com has acquired TeachStreet, the 5-year-old online marketplace that matches students and teachers.



It's an interesting story, does this signal Amazon's push into educational markets? Will it take TeachStreet's technology and scale it across its massive cloud infrastructure?



Nope. Geekwire's John Cook reports:

This is looking very much like a "talent acquisition." TeachStreet will be shut down on February 15th. Teachers who use the service will be able to export their class listings, and the company is offering a number of alternative services where teachers can market their classes.