Used to be that even the smallest venture fund focusing on the smallest deal sizes would adamantly insist they weren't interested in any investment that didn't have the promise of becoming a huge independent company. But now, particularly in Web 2.0 startups, folks are speaking more
reasonably about expectations, and increasingly looking fondly on trade sales at decent returns.
But BusinessWeek has a good
story insisting that for the industry to prosper, it must meet its traditionally oversized ambitions. It's not enough to have increased dealflow, increased public market exits and new money flowing in, the story argues, VCs must worry about all the longtime portfolio companies that are going nowhere, and find startups that aim for the fences.
The industry is heading toward an upheaval, BusinessWeek maintains. But when hasn't it been?
By the time things get bad enough that it is hard to raise new funds, the private equity bubble will likely have burst, leaving more money in search of the next hot asset class, so there is little need to panic now about that side of the business. I'm reminded that longtime players have come to expect upheaval, but understand their underlying mission will support continuity. Returning to a
remark made at a conference last summer by 40-year VC veteran Dick Kramlich about venture capital having become "quaint," upheaval in investment cycles doesn't change what venture funding fundamentally accomplishes. As long as there is capital available, VCs can succeed quietly by doing what they have always done in fostering innovation. "This is simple stuff," he said. "We don't need to get headlines, just keep doing what we do, creating new jobs and new technology."
- Clifford Carlsen
See Oct. 3 story from BusinessWeekSee Oct. 1 story from MercuryNews.comSee June 8 post from Dealscape
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