By the end of 2008, venture capital had been officially declared dead. Start-ups were laying people off so fast that even TechCrunch couldn’t manage to keep up. University endowments and foundations, the source of the “capital” in venture capital, were hemorrhaging so badly from their public company investments that many long-time believers in “alternative assets” declared a moratorium on venture capital. And the IPO market was a distant memory. Good times!
by Michael Malone, Opinion, The Wall Street Journal
Even as economic losses and unemployment levels mount, America’s most effective engine for wealth and job creation is being dangerously–perhaps fatally–compromised.
One of the differences between big companies and start-ups is that big companies tend to have developed procedures to protect themselves against mistakes. A start-up walks like a toddler, bashing into things and falling over all the time. A big company is more deliberate.
by Eric Savitz, Blogger and Columnist, Barron's, Tech Trader Daily
When the Internet and telecom bubble burst, Silicon Valley jobs evaporated: by 2005, California’s Santa Clara County–which includes San Jose, Palo Alto, Cupertino, Mountain View and other tech-focused towns–had given up more than 20 percent of its total job base, a loss of over 200,000 jobs. So how bad will it get this time around?
These days, the more you talk to folks about Silicon Valley’s venture capital industry, the more negative the message is becoming. And for good reason. There’s no more patience. Last time, circa 2001, the entire VC industry got a “get-out-jail-free card” after the Internet bubble burst.
by Venky Harinarayan, Founding Partner, Cambrian Ventures,
Think long term. Long, long term. In the short term, there will be pain in Silicon Valley. Start-ups will have to survive 2009. Layoffs will be in fashion: “You didn’t do a layoff? What’s wrong with you?” Venture capitalists will be hit just as hard. Their investors–the endowments, the pension funds and others–are hurting.
by Therese Poletti, Senior Columnist, MarketWatch, Tech Tales
Silicon Valley was all a flurry late last week after reports that some respected venture capitalists woke up from their rosy daydreams to the fact that Wall Street’s meltdown is going to have a big impact on their future.
A shakeout in the venture capital industry appeared to take hold in the third quarter of the year, even before the latest decline in the stock market began. And we’ve also learned one more reason why Sequoia Capital may have reacted as quickly as it did with its terrifying R.I.P. message to companies.
by Jon Gertner, Contributing Writer, New York times
One afternoon last May in Menlo Park, Calif., a venture capitalist named Ray Lane led me from his office to the parking lot, where an automobile had been delivered a few hours earlier by flatbed truck.
All tech start-ups need just a few ingredients to germinate: sophisticated money; first-rate technology universities; and a few template successes (a Google or a Facebook, and so on) to encourage founders to get off their duffs.
by Eric Savitz, Blogger and Columnist, Barron's, Tech Trader Daily
Secure Computing (SCUR) announced a deal this afternoon to acquire privately held Securify for $15 million, plus an earn-out of up to $5 million more. Secure can pay for the deal in cash, or at its choosing, partially in stock. The deal is expected to close in the fourth quarter.
How do you know when one of the world’s most respected investment firms has veered off path and bet wrong? That’s the crux of the question raised by a piece in this month’s Fortune magazine, entitled “Kleiner bets the farm” …
by John Murrell, Blogger, Good Morning Silicon Valley
Here’s all you need to know about the current sad state of the venture capital business: For the first time in 30 years, a fiscal quarter ended Monday without a single initial public offering for a venture-backed firm. Not a one. The machinery that, at its best, nurtures innovative businesses into viability (and at its worst blows money on overhyped fads) has ground to a halt.
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