Monday, January 5, 2009

Gloom and Doom for VC

Another gloom and doom article today in the Financial Times about the VC industry in 2009. However, I don't think it is as clear cut as the popular press would like it to be.

What I am seeing is a trend towards the two ends of the spectrum, early stage and later stage. The first is characterized by micro investors using the techstars/Y Combinator model, the second is characterized by the heavy infrastructure investments required by the cleantech buildout or bio/pharma. Both (if done right) are less dependent on near- or mid-term liquidity events. The first favors a fluid and nimble investor -- with a smaller pool of available capital. The second favors the massive pools of capital that were amased in 2006 and 2007.

Either way, with the right mindset there is no need for a shake out. The vulnerable investors will be the ones either with an out-dated vision/model or without any clear vision at all.

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Dividends and Preferences by Hank Heyming is licensed under a Creative Commons Attribution 3.0 United States License.