Comments on: Apparently 52.9% of Venture Capitalists are Deluded

By: chris

chris — Thu, 23 Jul 2009 11:45:41 +0000

a really good article, very interesting..

By: Should Venture Capitalist Sell Out To Secondary Firms? | Mendelson's Musings

Mon, 20 Jul 2009 19:04:28 +0000

[...] Every once in a while, I read something and go "huh?" The most recent was the report that 52.9% of venture capitalist think that VC is broken. [...]

By: valto

valto — Fri, 10 Jul 2009 11:36:30 +0000

amen – we have been working on "fixing this" for the past year already, and have launched our private beta about a week ago, this gives some hints on what's comming, but our full vision of the new model will be released by the end of the year.

By: valto

valto — Fri, 10 Jul 2009 11:30:05 +0000

I cant resist – this is a perfect comparison to US auto industry when all the big ones were betting on SUVs, Hummers etc. and suddenly the market trend was toward Toyota Prius and the big ones had not taken this in consideration in their plans at all.

Can we say auto industry is broken? Yes and no, depending on who (and in what part of the world) are you asking..

By: Jason Mendelson

Jason Mendelson — Sun, 05 Jul 2009 15:42:05 +0000

Great Susskind reference. Yep, it totally works

By: Frank Greces

Frank Greces — Sun, 05 Jul 2009 12:01:01 +0000

PS In rereading Susskind's "The End of Lawyers?"he talks about the "Technology Lag" (the gap between Data Processing and Knowledge Processing); bottom line, we have become very good at using technology to "capture, distribute, reproduce and disseminate information" in the form of data (otherwise known as DP), but now, in addition to all of the points that Jason bulleted above, we are becoming adept at Knowledge Processing, or building (often through entrepreneurial startups) tech platforms that allow us to "analyse, sift through and sort out the mountains of data that we have created". Think "glue" to use one of Feld's favorites. Susskind sums it up by stating that, "when knowledge based technologies allow us more effectively to manage these mountains of data…we will experience a paradigm (shift), moving from a print-based industrial society, to an IT-based information society"….one just need to look at the newspaper industry (another broken model; but that doesn't mean that we won't have access to our daily news over coffee every morning, right?) to witness this shift.

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By: Frank Greces

Frank Greces — Sun, 05 Jul 2009 11:49:45 +0000

Lots of good debate points. I think the one fact that we need to remind ourselves of is that all business models must evolve or they die. Top of mind, if we did a sample survey of top execs from many industries today, a majority would tend to admit that their business model is "broken"…just look at Big Auto, Banking, Real Estate, Big Law … and you will catch my drift here. I am far from an expert in the VC business model but I do follow some of the trends. Clearly the VC model is evolving, often by choice and sometimes by Darwinism..take a look at what Andreessen and Co. are up to now…..somebody must believe in thier "new" approach to the VC business model (IE a super angel fund approach…yep, what's old is new again)…http://www.businessweek.com/magazine/content/09_2...

The VC model will continue to evolve, and a good percentage of the existing funds will not be able to switch gears fast enough…and will crash and burn, while those that do will own a larger part of a "smaller market"….In with the new rules (for the VC biz model) and out with the old…

Rock On,

Frank

By: just.a.guy

just.a.guy — Wed, 01 Jul 2009 02:35:36 +0000

Then you and I have different definitions of "broken". If 50+% of VCs think their business is broken, I read that to mean that 50+% of VCs have business models that are unworkable given the assumptions on which they were built. When the majority of participants in an industry think it is broken, isn't it broken?

All of that said, if I'm part of a 3-5 person team with a $50-$150mm fund focused on low-cost software and information services companies I'm a very happy camper right now. But "the industry" (writ large) is not in that position, and is broken.

By: Jason Mendelson

Jason Mendelson — Tue, 30 Jun 2009 19:34:05 +0000

I’m happy to hear that. J

By: Anon

Anon — Tue, 30 Jun 2009 19:13:57 +0000

Problem is, the VCs who REALLY can be a partner and help build a company are few and far between.