Comments on: Sevin Rosen Unfunds - why?

By: Eric Jackson

Eric Jackson — Sat, 04 Nov 2006 13:04:30 +0000

With this announcement and CRV's move into angel investing this week, all signs are pointing to a definite shift in the traditional VC model.

As with any shift, there are likely to be winners and losers:

Winners:

The bluest of "blue-chip" VCs. The Sequoias and KPCBs of the world shine brighter when the maddening crowd is rushing to chase the latest trend of VC investing. They've been there and done that time-and-again.
Existing Angel Investors who have a track-record. When a space gets hot (i.e., angel investing), those who have been there for a while are the old wise men. Josh Kopelman, Jeff Clavier, and others will see a rise for their services even as others rush in. There will be a flight to quality.
Traditional VCs who are able to make the leap and really differentiate from other angel investors. Although CRV is a great firm, their success is not guaranteed. They need dealflow; their GPs needs to be seen as credible by non-nascent entrepreneurs; and they really need to be able to deliver value to their investments (beyond the simple "we love to roll up our shirtsleeves alongside our investee companies" platitudes).
2nd and 3rd Time Entrepreneurs: They're even more sought after following this news than they were before. We are heading for a Hollywood-type star system where Bill Nguyen announces his idea for his next start-up at lunch and the deal is done by dinner.

Losers:

Stuck-in-the-middle VCs: Those VCs who do a little bit of angel investing and a little bit of traditional are likely to do neither well.
Former Great VCs who don't adapt to changing times: Remember when Softbank was king of the hill? Hot VCs who have yet to reach the echelon of Sequoia and KPCB are not assured of long-term success. They are also likely to stick-to-what-they-(think-they-)know-best. Dangerous, when the rules of the game are changing
Later-stage/Mezzanine Investors: They just got even less relevant.

Thanks,

Eric

http://breakoutperformance.blogspot.com/2006/11/are-angels-new-vcs.html

By: Alexander Muse

Alexander Muse — Sat, 14 Oct 2006 23:16:44 +0000

Looks like Sevin Rosen might have tried to pull a snow job over on the NYT. Dan Primack is writing about it:

(link)

By: JPM

JPM — Thu, 12 Oct 2006 15:36:41 +0000

Maybe its time to realize that PE is not just about bailing out thru either trade sale or IPO routes… Smart Capital is the proper terminology for PE investments… you dont just get capital for expansion, growth… you get it along with a bunch of smart people (no matter how dumb they are!)

By: Prashant

Prashant — Tue, 10 Oct 2006 05:34:25 +0000

you know something ? have you heard of Greater fool Theory (http://en.wikipedia.org/wiki/Theoryofthegreaterfool) . with all the due respect to out going veteran i would like to say that one reason for this over heating is the Trend of Exit by sell of not by revenue or IPO and reliability on advertisement as a de facto revenue stream .

it seems World has run out of Enough fools . having an unregulated institution only Equity Exchange for pre IPO company can be a solution : ) essentially thats what being done here only under the veil

By: 10012

10012 — Tue, 10 Oct 2006 01:22:04 +0000

if you can’t take the heat get out of the kitchen! nice to blame the model. ironic this comes out while they’ve been trying to raise a fund for the last 6 months