DISQUS

Jonathan Aberman · 10 months ago

This is not really new information, but is a good reminder of what we in the Venture Community already know. What this article does remind us though is that often when something makes its way into print or the blogosphere it is referenced past events and making them current again -- something that reaffirms a negative cycle. Those of us that have money to deploy are looking forward and asking ourselves a few key questions: (i) what types of companies are going to be attractive to investors in three to five years, (ii) are our businesses properly configured to take advantage of those opportunities and (iii) how can we help entrepreneurs take the risk and succeed during a time where the negative energy is pervasive.

Anthony Ha · 10 months ago

I agree that this just confirms an existing trend -- one that VentureBeat has covered extensively -- but the data itself is new, and was just released today. You can't make an apples-to-apples comparison between 2007 and 2008 until 2008 is over.

elliottdahan · 10 months ago

The Venture Risk Investing industry is divided into 3 distinct groups: (1) Seed/Startup; (2) Traditional VC and (3) Exit

They are systemically, operationally and attitudinally different. They have different metrics for acceptance and success; funding, oversight, sourcing, profitability and, most importantly, infrastructure.

What is needed is a dedicated effort to work with, support and compensate the Seed Infrastructure (Incubators, Economic Development Agencies, Tech Transfers). This infrastructure already exists and provides the efficient sourcing, screening and post-investment oversight needed to develop Series A worthy companies. What is needed is a dedicated effort that is not geographically constrained. What is needed is a thorough Virtual Incubation system that brings both Community and Collaboration to all elements of the total Investing community.

By dedicating a private/public collaboration to increasing the value and viability of early stage companies you are also increasing their valuation for their Series A round; thereby leveling the playing field with what will be a smaller group of Traditional VC funds.

This Seed dedicated effort can take two forms:

(1) Standalone Fund
(2) Operating Division of a Traditional VC Firm

Please review the powerpoint – The START Fund - http://www.slideshare.net/ElliottDahan/start-fu...

I look forward to all comments.

Thank you,

Elliott Dahan
Elliott@thegrowthgroup.com

Anthony Ha · 10 months ago

This barely seems relevant to my post at all. Am I missing something?

Peter · 10 months ago

Elliot, is this a canned comment you're using to promote this "START" fund?

elliottdahan · 10 months ago

Peter -

This is not a canned comment. I wrote this in response to Anthony's post.

And "yes", I believe in the need and opportunity of The START Fund. I am hoping to implement this Seed fund decdicated to working with, supporting and compensating the Seed Community.

elliottdahan · 10 months ago

Anthony -

I believe my post is very relevant to your post.

By strengthening the Seed level, you strengthen the potential for successful exits.

But, you cannot expect the Traditional VC stage to work with, support or compensate the existing Seed Infrastructure (incubators, tech transfers, economic development agencies, etc.) You cannot expect the Angel level of investing to efficiently source, screen and provide oversight to a Seed Community with no geographic constraints.

First, strengthen the Seed Level

Second, "clean out" the traditional VC level

Thanks

Anthony Ha · 10 months ago

OK, fair enough. It would have been nice if you had made the connection more explicit in your initial comment, but I probably overreacted.

elliottdahan · 10 months ago

Anthony -

Perfectly understandable.

Have a good New Year and keep up your good writing - I really enjoy your work

Elliott

Dave McClure · 10 months ago

anthony: while the top-end is interesting, the median case (for exit via smaller M&A) is possibly more educational. might be useful to look at distribution curve / graph of exits on quarterly basis, and then compare median exits over time.

guessing overall trend is towards smaller median exit, which might be ok for angels & smaller VCs, not so great for traditional VC. also interesting if median skewed down a lot or a little in Q3-Q4/08, and going forward in 2009.

to summarize: median case may tell us more than outliers.

JoeDuck · 10 months ago

Anthony it would be nice to see more measures of the total investment in all startups or a cross sections of startups over various periods of time. I'm concerned that the stories always feature the big winners and thus I think inflate the actual VC returns which I think are very negative these days as companies go belly up.