Could VC be a Casualty of the Recession? • Hacker News Board

Re: Could VC be a Casualty of the Recession?

#111

Post by helveticaman » Sat, Dec 06, 2008, 4:14 AM UTC

blurry wrote: post #93

drwh0 wrote: post #34

Earlier quoted context omitted.

but greentech will require more funding per instance than any VC firm will be able or willing to put up. show me the VC firm that is going to put over $1 billion into any single investment...when it comes to nuclear or hydrogen, a billion might only bootstrap the company. these industries are going to need massive amounts of funding. only one entity can do it - uncle sam, DARPA and the DOE

If you believe Al Gore, for $90MM you can build a giant New Mexico wind/solar farm that would supply enough electricity to power the entire US. (It's been a while since I saw the presentation so some details might be wrong but I am at least in the ballpark, especially regarding the price tag). Seems like 10 VC firms could easily get that sort of money together.

90 Million? The entire US? That's way off. I haven't seen the numbers, but that's like saying a car engine can get 1500% efficiency, or that a ten-year-old neighbor can bench-press 2000 pounds. It's just not in the cards.

Re: Could VC be a Casualty of the Recession?

#112

Post by robak » Sat, Dec 06, 2008, 5:42 AM UTC

This is so obvious. I think it has been for a few years now. I would push it one step further: if you need to borrow money, you are not efficient enough.

Re: Could VC be a Casualty of the Recession?

#113

Post by hardaway » Sat, Dec 06, 2008, 5:55 AM UTC

In Arizona, if we depended on Vc, we'd be dead. We have a very vibrant startup community that works by collaboration,mentoring, and whatever it can scrape together. Do we start Google? no. Do we innovate? yes.

Re: Could VC be a Casualty of the Recession?

#114

Post by pg » Sat, Dec 06, 2008, 6:18 AM UTC

comatose_kid wrote: post #107

Paul - Assume that 1) your thesis is correct, and, 2) that a good startup hub is created primarily though the availability of investors (as observed in the essay "The Hacker's Guide to Investors"), Don't these two things imply that Silicon Valley's prominence as a startup hub will wane?

No. First of all, SV doesn't depend only on investors. All the support for startups is here, from lawyers to graphic design to (probably most important) other founders.

Second, not taking VC doesn't mean not taking investment. If startups downshift, the next lower gear is angels.

Re: Could VC be a Casualty of the Recession?

#115

Post by sielskr » Sat, Dec 06, 2008, 10:05 AM UTC

marvin wrote: post #82

sielskr wrote: post #50

Earlier quoted context omitted.

There could be 100 times as many U.S. public companies while Sarbanes-Oxley remains in effect?

Obviously not, but that wasn't the point.

Sarbanes-Oxley is probably not going to be repealed or significantly reformed, so was the point purely theoretical?

Re: Could VC be a Casualty of the Recession?

#116

Post by marvin » Sat, Dec 06, 2008, 2:32 PM UTC

sielskr wrote: post #115

marvin wrote: post #82

Earlier quoted context omitted.

Obviously not, but that wasn't the point.

Sarbanes-Oxley is probably not going to be repealed or significantly reformed, so was the point purely theoretical?

It's a mistake to view political barriers as insurmountable. It's practically impossible to repeal the legislation, but maybe someone will open another liquid market for equities through some weird loophole. And remember that we are talking about social change in a timeframe of decades here. There is no telling what could happen.

Efficiency and reason tend to win in the end. There is much to be gained by having less bureaucracy and red tape for public companies, assuming that they are public companies of a different type than what they are today.

Re: Could VC be a Casualty of the Recession?

#117

Post by electric » Sat, Dec 06, 2008, 2:49 PM UTC

"Imagine what it would do to the VC business if the next hot company didn't take VC at all."

No need to imagine. Just look North -- this is reality.

Neither RIM (makers of the blackberry) nor Cognos (now IBM) took VC funding.

VC has imploded in Canada and startups are surviving as they have always.

Re: Could VC be a Casualty of the Recession?

#118

Post by yason » Sat, Dec 06, 2008, 6:12 PM UTC

Sounds like the time to go get VC funding for an angel investor company.

Re: Could VC be a Casualty of the Recession?

#119

Post by gaius » Sat, Dec 06, 2008, 7:00 PM UTC

helveticaman wrote: post #111

blurry wrote: post #93

Earlier quoted context omitted.

If you believe Al Gore, for $90MM you can build a giant New Mexico wind/solar farm that would supply enough electricity to power the entire US. (It's been a while since I saw the presentation so some details might be wrong but I am at least in the ballpark, especially regarding the price tag). Seems like 10 VC firms could easily get that sort of money together.

90 Million? The entire US? That's way off. I haven't seen the numbers, but that's like saying a car engine can get 1500% efficiency, or that a ten-year-old neighbor can bench-press 2000 pounds. It's just not in the cards.

"If you believe Al Gore" being the key phrase :-P

Re: Could VC be a Casualty of the Recession?

#120

Post by EngagoTeam » Sat, Dec 06, 2008, 8:19 PM UTC

1) Time is money. All the time a start-up invest in pleasing and answering VC's, it is time that they could have spending on developing or marketing their product or solution.

2) Maybe VC's will now have to approach start-ups and ask if they can help to grow the company.

3) Currently there are many small companies running out of money. Larger companies will buy them up at prices below the investments VC's have made. In many cases VC's never going to get their $33mio back on companies that hardly have a revenue of $10mio in a limited market.

(We're self funded: Engago Technologies Ltd.)