You already know the about the state of the venture capital industry in 2009: venture investing down (32%), exits down (14%; slowest exit year for VC backed companies since 1995), fundraising down (56%),IPO’s almost non-existent (8 venture backed IPOs in 2009). It’s a
bleak picture for the industry overall, even if there’s a group of us
that continue
to believe
this is a great market in which to be investing (and it clearly is).
These stats got me thinking about the future of the venture industry and
I thought I’d offer up some thoughts on where we might be headed.
First, let me frame the conversation by stating that I agree with Fred Wilson’s assumption that somewhere around $15Bn is the right “steady state” investment pace for the venture industry as an asset class. At this investment level the return profile of the industry maps to a reasonable expectation of inputs and outputs (the money invested in start-ups as compared to the exit activity). By that measure, we actually still have a ways to go to reach that equilibrium in the venture markets.
To read the full, original article click on this link: The new era of venture capital | Seth Levine
Author: Seth Levine
