Comments on: Proof: Group-think a Dominant VC Trait

By: Don’t Blame Venture Woes on the Economy; It’s the VCs’ Fault

Don’t Blame Venture Woes on the Economy; It’s the VCs’ Fault — Wed, 10 Jun 2009 04:03:02 +0000

[...] of several thousand people on a sinking ship rushing to grab a place on 10 lifeboats. That kind of group-think isn’t going to get LPs excited about investing, and it certainly isn’t going to boost [...]

By: VCs Find It Hard to Raise Money, Too

VCs Find It Hard to Raise Money, Too — Mon, 13 Apr 2009 15:53:16 +0000

[...] is that many VCs are holding onto their cash while they wait for conditions to improve — a lemming-like mindset of cash conservation that won’t help pull us out of the downturn. The other reason is that the limited partners [...]

By: “What Keeps Us Going?” By G. | bad times

“What Keeps Us Going?” By G. | bad times — Tue, 23 Dec 2008 01:51:19 +0000

[...] Proof: Group-think a Dominant VC Trait Posted by davemackey 1 day 7 hours ago (http://gigaom.com) [...]

By: sscheper

sscheper — Fri, 19 Dec 2008 06:17:13 +0000

Awesome

- Scott from http://scottdig.com

By: Cleantech VCs New Year’s Resolution: Be Conservative

Cleantech VCs New Year’s Resolution: Be Conservative — Fri, 19 Dec 2008 04:03:15 +0000

[...] Millennium Finance Corp. of Dubai plans to launch a $200 million fund for renewable energy investments in partnership with Chicago-based Advanced Equities. The fund, set to be managed from a new office in India, will focus on “late-stage firms with low technology risk and established revenue streams,” Cleantech Group reports. In other words, it will serve as Exhibit A for the National Venture Capital Association’s forecast that VCs will steer clear of seed and early-stage companies in 2009. Translation, courtesy of Om Malik: In a stormy year, venture capitalists will be hiding under their desks. [...]

By: AMEE: New Funds, Aiming to Aggregate ALL the Energy Data in the World « SmallCapWorld

Thu, 18 Dec 2008 19:34:51 +0000

[...] This sort of investment may, happily, be a significant variant from the statistics collected by Om Malik, who translates them by saying that in 2009 VCs will be “hiding under their desks.” (http://gigaom.com/2008/12/17/proof-group-think-a-dominant-vc-trait/). [...]

By: Cleantech VCs New Year’s Resolution: Be Conservative « Earth2Tech

Cleantech VCs New Year’s Resolution: Be Conservative « Earth2Tech — Thu, 18 Dec 2008 18:00:20 +0000

[...] Cleantech VCs New Year’s Resolution: Be Conservative Written by Josie Garthwaite No Comments Posted December 18th, 2008 at 10:00 am in Startups Millennium Finance Corp. of Dubai plans to launch a $200 million fund for renewable energy investments in partnership with Chicago-based Advanced Equities. The fund, set to be managed from a new office in India, will focus on “late-stage firms with low technology risk and established revenue streams,” Cleantech Group reports. In other words, it will serve as Exhibit A for the National Venture Capital Association’s forecast that VCs will steer clear of seed and early-stage companies in 2009. Translation, courtesy of Om Malik: In a stormy year, venture capitalists will be hiding under their desks. [...]

By: National Venture Capital Association Survey | KillerBlog

National Venture Capital Association Survey | KillerBlog — Thu, 18 Dec 2008 16:16:10 +0000

[...] just posted this about a recent Survey the NVCA just did, it’s kinda [...]

By: Allen

Allen — Thu, 18 Dec 2008 05:59:16 +0000

The whole industry is guilty of group think. Regularly.

So while I agree that VCs are guilty from time to time, I’m not sure that this is the case here.

Given how much capital has been erased from the economy, its easy to see how in absolute terms there is going to be less of it available for VCs to disperse. Regardless of what happens to VCs relative access to free captial, the pie has shrunk by enough that there is going to be less available to invest.

And given the way on line advertising is looking for next year I would think twice about putting money into some advert centric business model – clean tech might well look more attractive.

Let’s wait and see, but I dont think the projections are wrong. And when you’re right its hard to tell the difference between group think and good decision making.

By: Jamie Hall

Jamie Hall — Thu, 18 Dec 2008 03:02:23 +0000

Every year is a difficult year for most entrepreneurs :)

By: charlie

charlie — Thu, 18 Dec 2008 01:14:15 +0000

While the lemming reputation may be well earned, I don’t think your comments about ‘hunkering down’ are fair. Truth is that many GP’s are not sure of the posture of their LP’s, and their ability to fund ’09 commitments. Till they do, it would be foolish to invest at the same pace, when your fund may suddenly be 30% smaller. It is also logical (though unfortunate) that the earliest stage investments would be hardest hit; as this asset class has the least amount of capital predictability.

By: David Mullings

David Mullings — Wed, 17 Dec 2008 20:04:31 +0000

It is unfortunate that this myth about lemmings blindly following each other over a cliff persists in society despite the many times it has been shown to be false.

It however is not false that VCs seem to suffer from severe group-think, not much different from traditional stock market investors.

Are they any different from the many people who buy things just because the item is popular? It seems that we humans suffer from group-think naturally.