The current wave of IPOs that investors hope will extend from LinkedIn through Groupon and onto Facebook is making some venture capitalists very, very wealthy. But the bonkers bubble money isn’t exactly getting spread around. Bloomberg reports that the success of firms like Sequoia, Greylock, Accel, and Andreessen Horowitz, all of whom have equity in the most valuable start-ups, is driving a massive wedge between “the venture-capital industry’s haves and have-nots.”
LinkedIn’s IPO, for example, has already yielded $2 billion in paper profits for backers like Sequoia and Greylock. Groupon hasn’t gone public yet, but its top investors like Accel and New Enterprise could end up owning a $5 billion stake. These are accredited private investors we’re talking about, so it’s not as though the VC-equivalent of the top one percent is making paupers of their competitors. But it is creating vastly disproportionate access to deal flow and capital.
To read the full, original article click on this link: Venture Capital Class Warfare: ‘The Rich Are Getting Richer’ | Betabeat — News, gossip and intel from Silicon Alley 2.0.
