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Venture Capitalists' Failure to Make Money is a Problem for Entrepreneurs

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11–17 of 17 posts

Re: Venture Capitalists' Failure to Make Money is a Problem for Entrepreneurs

#11
It's not very surprising that new investment into funds would tick down a bit in 2009, the year they are discussing. These investments aren't made on the spur of the moment, and the planning period of 2008-2009 was dead in the middle of the largest economic downturn in 80 years. All sorts of people took money off the table while they watched to see what would happen. It's actually more surprising that they point out various metrics that "hadn't been this low" since 99/97 etc - those were of course grand days for venture capitalists.

The article notes an uptick in 2010. With all of the stories about money chasing deals, big early valuations and term sheets being brought to first meetings, I'd bet that uptick is probably a bit more than slight.

The effect of individuals bypassing funds and investing directly in early rounds shouldn't be overlooked. The article is very dismissive of the practice, but it is taking its queues from research done by an association with venture capital in it's name...

Re: Venture Capitalists' Failure to Make Money is a Problem for Entrepreneurs

#12

Several people have remarked that this doesn't seem to be affecting technology entrepreneurship much, which seems true from what I've seen of software technology startups in my area. However, not being able to get funding profoundly impacts other types of startups that have higher initial/research/production costs: green energy, manufacturing, basically anything that isn't just a website and iPhone app. And that's re…

It's not a bad thing if they were bad investments to start with. Mal-investment creates bubbles.

Re: Venture Capitalists' Failure to Make Money is a Problem for Entrepreneurs

#14
post #13

A 4.3% return on the 5 year funds is quite low indeed. I think the problem is that VCs aren't investing nearly enough in mobile social music local search review aggregators.

Venture capital fund ≠ portfolio of web-based start-ups

Re: Venture Capitalists' Failure to Make Money is a Problem for Entrepreneurs

#15
post #13

A 4.3% return on the 5 year funds is quite low indeed. I think the problem is that VCs aren't investing nearly enough in mobile social music local search review aggregators.

> mobile social music local search review aggregators

Seriously?

Re: Venture Capitalists' Failure to Make Money is a Problem for Entrepreneurs

#16
post #15
post #13

A 4.3% return on the 5 year funds is quite low indeed. I think the problem is that VCs aren't investing nearly enough in mobile social music local search review aggregators.

> mobile social music local search review aggregators Seriously?

Thou art jesting, I am sure of it.
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