Archive for September, 2008
Posted in September 27th, 2008
The Evolution of VC
Whatever the future may bring, venture capitalists say, their industry model isn’t dying, it is merely evolving.
Entrepreneurs will always provide innovation regardless of market conditions. Right now there are thousands of emerging growth companies located throughout the world. VC will find the best companies and Investment capital will continue to flow [...]
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Posted in September 26th, 2008
VC Fallout
During the dot com era more than 1,000 venture funds were established but many of those funds have either shrunk, gone out of business or have been absorbed by other funds. By the end of the day we will see somewhere between 500 to 600 funds survive.
According to Ernst & Young, U.S. venture firms [...]
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Posted in September 25th, 2008
Over the past 30 years or so, U.S. venture capitalists and investors have enjoyed attractive returns of 17% to 18%, says Josh Lerner, a Harvard Business School professor and co-author with Harvard colleague Paul Gompers of The Money of Invention: How Venture Capital Creates New Wealth. Returns peaked at 190% during the dot-com boom in [...]
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Posted in September 24th, 2008
Mergers and acquisitions in the second quarter of 2008 fell 59% from the previous quarter last year, says Dow Jones VentureSource.
For the first time in 30 years there were no venture-backed initial public offerings — when private companies “go public” and sell stock — in the second quarter of 2008, reports the National Venture [...]
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Posted in September 23rd, 2008
Some venture capitalists (“VC”) believe that their traditional industry model needs to be revised. That is why we are starting to see more and more companies being funded in the “BRIC” countries (Brazil, Russia, India and China). The days of sitting back and waiting for companies to come to you for funding is [...]
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Posted in September 22nd, 2008
VC’s expect to cash out of their investments five to seven years after they have funded a company. In the past the traditional way to get cashed out was via the IPO. Those opportunities are few in today’s marketplace. Most of the IPO’s today raise north of $200 million and most of the companies today [...]
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Posted in September 12th, 2008
VC’s are under constant pressure to find that next home run that will result in an IPO opportunity with results like Google, eBay or future IPO candidate Facebook. Facebook already has a pre IPO valuation of $15 billion. A VC can fund twenty companies that never see the light of day if they end up [...]
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Posted in September 11th, 2008
The rules for investing in foreign countries are also very different. In most foreign countries you need a have an affluent business person or politician as a partner to get anything accomplished. Paying people off is a very common way of getting things done. What would put you in jail in the US is an [...]
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Posted in September 10th, 2008
So what’s a VC to do? here they are sitting on all this capital but they can’t find enough good companies to fund. The answer – widen the net – go global. Once that decision has been made then the possibilities become infinite.
There is a huge rise/return quotient when VC’s invest in companies outside the [...]
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Posted in September 9th, 2008
It wasn’t long ago that VC firm’s sole concentration was on US based emerging growth companies. In many cases, if your company was about to get a substantial funding, they insisted on moving the company into their back yard, namely Silicon Valley. Less travel for them and they can keep a close eye on their [...]
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