Comments on: The Venture Industry Needs to Slash Its Investments

By: Venture Capital and the Decline of the Startup Middle Class: Tech News and Analysis «

Fri, 21 Jan 2011 05:01:45 +0000

[...] the 2006-2008 time frame. While it still hasn’t shrunk to the point that some experts had called for, it’s getting closer to a new normal baseline according to John Taylor, VP of research at the [...]

By: The Tech IPO Market Is Back — For Brand Names Only

The Tech IPO Market Is Back — For Brand Names Only — Mon, 09 Aug 2010 16:08:40 +0000

[...] we have a return of the IPO, we’re not likely to have a return of the boom that made dumping almost $27 billion a year into venture-backed startups from 2004 through 2008 feasible. So when Fred Wilson of Union Square [...]

By: As VC Industry Shrinks, First-Time Investments Plummet – GigaOM

As VC Industry Shrinks, First-Time Investments Plummet – GigaOM — Fri, 22 Jan 2010 05:01:01 +0000

[...] 21, 2010, 9:00pm No Comments 0 0 0 0 It’s been suggested that the venture capital industry needs to shrink to as little as half its former size, and new data from the National Venture Capital Association [...]

By: Are VCs Divorced From Reality? – GigaOM

Are VCs Divorced From Reality? – GigaOM — Wed, 16 Dec 2009 16:28:40 +0000

[...] far is incredibly low at about $12.3 billion through the first three-quarters of the year, but with general partners and experts saying the industry needs to set a goal of investing about $13 billion, the 44 percent [...]

By: VC Funding Heading Back to Pre-Bubble Levels

VC Funding Heading Back to Pre-Bubble Levels — Tue, 21 Jul 2009 05:27:42 +0000

[...] and the economic malaise, and may also represent a permanent shrinking of the industry that several experts have called for in the last nine months. Judging by the types of companies still receiving money, [...]

By: The VC Industry Is Too Fat and the Exits Are Too Thin

The VC Industry Is Too Fat and the Exits Are Too Thin — Wed, 29 Apr 2009 18:11:24 +0000

[...] industry is depressing returns. His conclusion is that the venture industry doesn’t scale. Fred Wang, over at Trinity Ventures, shares this outlook, and he estimates that venture capital firms ought to raise $15 billion a year, rather than $25 [...]

By: VC Funding Continues Nosedive: May Hit Bottom and Start Digging

VC Funding Continues Nosedive: May Hit Bottom and Start Digging — Sat, 18 Apr 2009 04:01:27 +0000

[...] been weakening the venture model since so much capital poured in during the bubble years. Some have argued that venture firms should be pouring between $10 billion and $15 billion into startups each year, not the annual average of $26.51 billion invested over the last five [...]

By: VCs Find It Hard to Raise Money, Too

VCs Find It Hard to Raise Money, Too — Mon, 13 Apr 2009 15:53:31 +0000

[...] next few years — the venture model is ailing. Exactly how is a matter of debate: Some argue there’s too much money in the space, and others argue that the days of huge IPOs are a thing of the past. One way or another, one result [...]

By: Tech Startups Don’t Need the Valley Unless They Need VC

Tech Startups Don’t Need the Valley Unless They Need VC — Mon, 16 Mar 2009 02:01:41 +0000

[...] in venture funding and a giant business built in three to five years may be on the wane as the venture world faces its own tectonic shifts (see video below). “The model of tech getting used to VCs throwing crazy amounts of money at [...]

By: 花蓮民宿

花蓮民宿 — Fri, 27 Feb 2009 15:49:04 +0000

How many VC’s have lost their jobs? Not many at all. That’s because unlike the portfolio companies which are told to slim down their workforce these VC funds can live off their 2% management fees like fat cats in up markets and down markets. Its a joke!

By: 花蓮縣長

花蓮縣長 — Sat, 21 Feb 2009 14:10:25 +0000

Any asset class that under performs over a long period of time will see diminished investment. So whether venture industry slashes investment or not is immaterial; the investors will make the decision for it.

By: 楊文值

楊文值 — Wed, 18 Feb 2009 11:13:00 +0000

They need to stop investing in things that are dumb. Things that have no income potential. Things that can’t even stay stable for more than a week at a time.

By: Frank T

Frank T — Sun, 15 Feb 2009 22:51:06 +0000

@Rizzo and McClure

Well said!

By: Paul

Paul — Sun, 15 Feb 2009 03:02:46 +0000

I find it laughable every time a VC says that his competitors should raise less, invest less, or disappear, but their fund is (a) doing fine and (b) doesn’t need to reduce its capital base or return capital to LPs.

I would find Fred’s thesis a lot more credible if he put his money where his mouth is.

By: PerfectMoney

PerfectMoney — Sun, 15 Feb 2009 02:03:14 +0000

when economy hit the ground of many INVESTOR expectations,the bright side of it should be in the hand of many INVENTORS.they think harder,they put the energy to perform better presentations and they turn to more originality to take the hole of gap differentiations that will make benefit to the end user,I think It is oke when investment is slowing down,this what make more energy for the new idea to reveal,new technology to develop and new service to be given

By: dave mcclure

dave mcclure — Sat, 14 Feb 2009 16:32:43 +0000

Frank Rizzo is spot on. it's possible the industry could handle all the capital (or not), but only if investment outcome expectations are much smaller. Alan Patricof (who now runs $75m GreyCroft but used to run a $30b fund) also noted in the NYT earlier this week that venture returns are out of touch with reality and that most liquidity is M&A exits in the $25m-$100m range. if that's correct then the total for VC funding going into most companies should likely be under $5-10m, and possibly even under $2-3m. this would argue for most funds being dramatically smaller, or alternatively that their # of deals is much higher / avg size is much smaller. currently very few funds look like this.