The VC business can be a strange game sometimes. That was typified for me this week courtesy of two lines in my WSJ reader (see below). While the “Larry the Bird” makeover took top billing on my screen, the two entries surrounded in red got me thinking about more than what the Twitter logo would look like in a green “33″ jersey.

As the so-called “fall-out” from the Facebook IPO continues to annoy many of us, the inevitable cautionary tales have begun to emerge on how some bit of botched due diligence on Facebook’s part will now devalue the ideas of aspiring entrepreneurs in Silicon Valley and beyond. Immediately above this entry, however, was a story about how Donuts, Inc. closed on “$100 million in a mammoth series A funding round” to provide unique domain name extensions beyond the typical .com, .net., .edu ditties that we’re used to.

'mammoth' funding rounds juxtaposed against a cautionary tale

While there is certainly room to debate the correlation of the two articles – and please, feel free to do so in the comments section below – the key takeaway for me is that no one … repeat, no one … truly knows what drives start-up valuations on a case-by-case basis. So, while the Facebook fall-out may well suppress start-up valuations in general for some period of time, the Donuts funding round, combined with other events like announcement of the Dell Innovators Credit Fund prove that venture capital money is flowing. Furthermore, it proves that money will flow in big numbers to companies deemed to have great ideas.

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