It's always an interesting week in venture capital. We find the best stories, blog posts and other information inside the VC ecosystem here in the US and in happening places around the world. Onward dear reader…
Medical device venture capitalist Deborah Mills-Scofield has a heartfelt and thought-provoking post up on why she's a VC.
Innovation Excellence: Why Am I a VC?
It is easy to see her passion for funding startups that aim to improve the human condition through better medical devices.
DETROIT AS A MODEL VC
You wouldn't necessarily guess that the city of Detroit is a model for a successful venture capital approach to entrepreneurship.
Crains Detroit: The New Model for Entrepreneurship?
Consulting firm McKinsey & Co. has highlighted Detroit's Renaissance Venture Capital Fund. Now, consumer packaged goods giant Procter & Gamble is modeling its corporate VC effort after Renaissance.
VENTURE CAPITAL TRENDS
Venture capital financing will focus more on quality, rather than quantity, according to a recent post by Redpoint Ventures’ Tomasz Tunguz.
TechCrunch: Quality over Quantity
With the amount of money raised by venture capital firms falling below a 15 year trailing median, VCs will be required to reduce their investment pace.
CHINA CROWD LENDING
The Middle Kingdom is seeing a boom in online micro-lending and crowd funding activity.
Bloomberg: China's Shadow Bankers
While there will be some notable successes, the failure rate will be high and the stakes even higher.
SOCIAL PROOF ON THE OUTS?
Social proof is a concept that was popularized in the early stage technology investment community by AngelList and basically refers to a startup garnering additional investors based on who their existing, committed investors are.
Sneakerhead VC: Social Proof Stinks
Now we have the backlash, with three reasons why social proof is a bad idea.
VENTURE CAPITAL FUNDRAISING IMBALANCES
VC David Beisel has another insightful post about the significant drop in venture capital fundraising.
GenuineVC: VC Paradox
He thinks that the current "barbell" characteristic of successful fundraising by early stage in late stage venture capital firms actually points to a more optimistic, i.e., leading indicator about future fund flows into venture capital.
SILICON VALLEY VC CONFIDENCE
The Silicon Valley Venture Capitalist Confidence Index for the second quarter of 2012 is out.
Mark Cannice, Ph.D.: VC Confidence Index (PDF)
Although confidence dropped in the second quarter, "confidence in the fundamentals of the venture model persists".
LIFE SCIENCE ACQUISITION ACTIVITY
Big Pharma is on the hunt for acquisitions, but the terms haven't been easy.
Wall Street Journal: Life Science Acquisitions Rose As Structured Deals
WSJ referenced a 2011 period report by Silicon Valley Bank managing director Jonathan Norris which said that although acquisition activity for Pharma and medical device startups was up in 2011, deal structures reflected a reduced risk appetite by acquiring companies.
PUBLIC MARKETS AND TECHNOLOGICAL CHANGE
Nic Brisbourne thinks that public markets may not be well-equipped to deal with the accelerating pace of change.
The Equity Kicker: IPO Mistakes
He thinks that the financial world’s fondness for the discounted cash flow (DCF) method of valuing companies doesn't work very well with rapidly changing markets.
VC FUNDRAISING FIGURES
Venture capital fundraising tracker Preqin has a post on the state of early-stage VC firm fundraising.
Preqin: Early-Stage VC Fund-Raising Thru July 2012
It's important to know that the data is all about the definition of what is "early-stage”. Interestingly, they include the $1.5 billion third fund from Andreessen Horowitz, which is a large, multistage firm. So their definition may be a wide one.