VentureBeat - Latest Comments in Expect to see start-ups and VCs hit standoff over valuations

Re: Expect to see start-ups and VCs hit standoff over valuations

Guest — Wed, 14 Oct 2009 01:21:14 -0000

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Re: Expect to see start-ups and VCs hit standoff over valuations

Engago team — Mon, 20 Oct 2008 04:05:45 -0000

If the start-up has a business model, is break even or makes profit, then VC's will come and try to get a piece of the cake.
On the other side if your VC funded start-up is burning money, then VC's probably want to dump it as fast as possible. (example: Identity Engines www.idengines.com
On sale:
http://boic.wordpress.com/2...

Re: Expect to see start-ups and VCs hit standoff over valuations

Jordan Elpern-Waxman — Sun, 19 Oct 2008 01:19:15 -0000

Good article overall, but I'm not sure what the point was in using the three NEA examples. It seems like pretty bad statistics to extrapolate from three firms in different industries and stages. There are so many other factors that determine a company's valuation: sub-industry ("healthcare" is a pretty broad field), revenue, earnings, number of customers, product stage, etc, not to mention the subjective "sense" that a VC has to project whether a company will succeed. While these macro-VC trends are useful for sizing up the industry, it's hard to see the connection between them and the fates of these three firms.

Re: Expect to see start-ups and VCs hit standoff over valuations

bob — Mon, 13 Oct 2008 14:55:00 -0000

VC's and founders have always argued over valuations in good markets or bad not a real news flash.

Re: Expect to see start-ups and VCs hit standoff over valuations

Scott — Mon, 13 Oct 2008 02:27:05 -0000

I know; however, what's ironic is that the only thing making them money is the private sector--specifically VC investments.

Even more ironic--the VCs with the best returns tend to be 1st time VCs ("emerging managers").

If anything, it could help VCS. Less money pumped into million-loss hedge funds; more into VC firms.

Re: Expect to see start-ups and VCs hit standoff over valuations

Allan — Mon, 13 Oct 2008 02:09:46 -0000

Scott - that is precisely the distinct possibility. VCs get their money from large institutions like Calpers and university endowments. These institutions allocate only a certain small percentage of their overall portfolio to venture capital and other alternative asset classes. Most of their money is invested in public equities and interest bearing debt instruments. When the general markets take a collective dump like we've seen in the last few weeks, these institutions see their overall portfolio shrink considerably. This means there will be less money allocated to VCs. Thus, VCs will slow their investments in startups and some of the bottom tier VCs won't even be able to raise new funds.

Re: Expect to see start-ups and VCs hit standoff over valuations

neil weintraut — Sun, 12 Oct 2008 22:30:40 -0000

matt, valuations will drop and there may be some down rounds. that's not a headline. next time try and come up with something a bit more original, if you can

Re: Expect to see start-ups and VCs hit standoff over valuations

Scott — Sun, 12 Oct 2008 12:53:05 -0000

I don't know...
After reading the first paragraph I had to stop.

It appears as if everyone is crying, "It's the end of the world!"

When, in fact, Angels are the ones doing most of the crying. VCs are sticking to their guns and willing to invest if they see a promising opportunity.

The only way VCs will stop investing is if their funding sources dry up (CAlpers, endowments, etc.).

VCs will continue to invest because that's what VCs do. They invest. If not, they'd be out of work.

- Scott from VentureDig

Re: Expect to see start-ups and VCs hit standoff over valuations

Berislav Lopac — Sat, 11 Oct 2008 07:33:51 -0000

"For the start-ups with no angel or VC backing, forget about raising money."

The conventional wisdom might say that, but I really don't see why is that so, and especially why should that happen in current situation. The cash won't go away -- it's only that those who have it won't be able to put it to work through traditional ways -- loans and stocks -- and will have to find new ways to increase their wealth. And what better way than to put it into a venture which will bear its fruit in a 3-5 years, when the current crisis should be ending? If anything, early stage investments should only increase in the coming years...