If you were to listen to the venture capitalists speaking at last night's panel discussion on "
Where the Hot Money Will Be Going in 2008", you would have no idea we were in the midst of one of the busier times for venture capital investment. Based on the participating quartet's views, the panel would have been more aptly titled, "Where the Lukewarm Money Might Possibly Be Going Some Time Over the Next 12 to 24 Months."
That's because the four panelists gave very little detail about which sectors or trends they are excited about in the upcoming this year. There was talk of green tech, SaaS and digital media, but when I pressed them to drill down into specific sub-sectors, most of them rejected the suggestion. When I asked to name a promising SaaS or digital media startup that has received seed or first round funding in the past six months from another venture capital firm that they believe is promising, they ignored me. All they could muster was NetSuite and SuccessFactors, companies formed and funded years ago.
The panelists began the night at Wilson Sonsini's offices in Palo Alto by noting that the spotlight on micro-computers and gadgets at
CES earlier this week is not a particularly ripe area for venture investment. They went on to spout out cliches about a willingness to fund a guy with an idea and the need for entrepreneurs to trust the venture capitalist they bring a business plan to. (
Disclosure: I am jaded and those cliches may be useful to entrepreneurs attending a venture capital panel for the first time.)
Despite a lot of fluff, there was some substance. Rob Rueckert, senior investment manager at Intel Capital pictured at right, is looking closely at ways to profit from the ongoing move toward mobile computing. This could include strengthening connectivity to making devices more presence-aware. Rueckert also believes there is an opportunity for quick exits by creating companies that allows companies such as Oracle and SAP that cater to enterprises to offer Web 2.0 technologies to their customers.
Ken Gullicksen, a partner at Morgenthaler Ventures pictured at left, is interested in
off-deck mobile opportunities. He thinks that as the web browsing experience on the mobile phone improves, there will be startup opportunities. "The knee of the curve is finally coming."
Raman Khanna, a general partner at Onset Ventures and pictured at right, was the only panelist that responded directly to both my questions about specific areas within SaaS or digital media he's interested in and a specific startup within one of those areas he thinks holds promise. Khanna is trying to grasp opportunities to
build upon the social network platforms being developed by Facebook, Google and others. And he said that Prosper, the peer to peer online lending startup backed by Benchmark Capital, is pursuing an intelligent business model.
- Joshua Jaffe
