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More Venture Capital Industry Debate

Published: 8/26/2009 2:03:10 PM, comments: 0

Here are a few links about recent discussions on the future of the venture capital industry:

Bill Gurley on the VC industry

Michael Fitzgerald

Cheers,

Don Jones

VentureDeal

The Denominator Effect

Published: 8/20/2009 9:52:23 AM, comments: 1

Venture capital firms are raising less money these days.  Why is that?

The primary reason is that their limited partners - university endowments, pension funds and wealthy family offices - simply have less money to invest due to stock market and other markdowns on the value of their portfolios.

Since the money pie has gotten smaller, this means that the amount of the pie that is allocated to "alternative investments" such as venture capital is reduced, even if the percentage of the pie remains the same. This is the denominator effect.

Thus, it behooves the entrepreneur seeking funding to understand that there is a greater emphasis on capital efficiency for their entrepreneurial ideas.

Cheers,

Don Jones

VentureDeal

Venture Capital in 2020

Published: 8/5/2009 10:40:45 AM, comments: 0

Here is my take on the venture capital world in 2020:

Lots of smaller firms: $100 million fund size is typical

Few large firms: multibillion dollar fund sizes

Mobile applications will be the next major paradigm shift

Liquidity markets for entrepreneurs and VCs - other than major stock exchanges - will be popular

Average annual total venture capital invested will be $20 billion

Cheers,

Don Jones

VentureDeal

Don Jones
CEO, VentureDeal

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