The current imbalance in the supply and demand for venture capital is creating opportunities for V.C. funds.
New limited partner commitments to venture capital funds have dwindled in recent years. This scarcity of capital has created its own Darwinian effect, with a new breed of start-ups flourishing as a result of innovation rather than capital-induced growth. As these companies mature, however, many of them are looking to venture capitalists for the money and expertise to realize their potential.
Back when the Nasdaq peaked in March 2000, liquidity was abundant, with unprecedented valuations for initial public offerings and acquisitions. Because of this bubble, venture capital returns in the 1990s skyrocketed. And as investors grew increasingly bullish on venture capital, limited partner commitments into new venture capital funds shot up to a high of $86 billion in 2000, well over 300 percent of the level two years earlier.
To read the full, original article click on this link: Investing at the Bottom of the Venture Capital Cycle - NYTimes.com
Author: MIKE KWATINETZ and CAMERON LESTER
