Comments on: Analysis of Venture-Backed Liquidity Events Since 2003 http://www.rockytopmba.com/2009/07/02/analysis-of-venture-backed-liquidity-events-since-2003/ The Life Less Ordinary of an MBA in East TN Wed, 17 Feb 2010 19:41:37 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Alex Lavidge http://www.rockytopmba.com/2009/07/02/analysis-of-venture-backed-liquidity-events-since-2003/comment-page-1/#comment-4591 Alex Lavidge Thu, 02 Jul 2009 14:59:43 +0000 http://www.rockytopmba.com/?p=657#comment-4591 Right. And I was reading this morning about the new study from Dow Jones VentureSource about how liquidity levels for startup companies have gone down from around $6.5B in 2Q of 08 to $2.8B in the last three months. I found these charts revealing of this macro-trend starting with 2002 to present: http://i.cmpnet.com/eetimes/eedesign/2009/chart1_070109.gif From a tech sector perspective, what I find interesting is what I hope is a trend of allocating VC capital toward seed investments. Y Combinator announced this past March their relationship with Sequoia Capital and some other prominent angel investors which I thought was really cool to create a $2M seed capital fund: http://www.techcrunch.com/2009/03/16/y-combinator-gets-the-sequoia-capital-seal-of-approval/ I like the formula of VCs helping to get as many companies going for $5-$15K as possible and as long as they all meet the criteria for having a strong proof of concept. From there it's a numbers game and VC firms that that take the lead in this direction have closer relationships with prospective Series-A investments to the IPO all-stars. Reminds me of the old saying, "before you reap the harvest you have to first plant the seeds." That attitude can help turn these trends around that you're talking about perhaps. Also I like your thought about how we don't have a lot of coverage in the media regarding early-stage investing. We've been talking a lot at Knoxville Overground about this and are another few months away I think from raising and earning the money we need to launch a multimedia platform that can hopefully evolve into such a news source. I'll keep you posted. Right. And I was reading this morning about the new study from Dow Jones VentureSource about how liquidity levels for startup companies have gone down from around $6.5B in 2Q of 08 to $2.8B in the last three months.

I found these charts revealing of this macro-trend starting with 2002 to present: http://i.cmpnet.com/eetimes/eedesign/2009/chart1_070109.gif

From a tech sector perspective, what I find interesting is what I hope is a trend of allocating VC capital toward seed investments. Y Combinator announced this past March their relationship with Sequoia Capital and some other prominent angel investors which I thought was really cool to create a $2M seed capital fund: http://www.techcrunch.com/2009/03/16/y-combinator-gets-the-sequoia-capital-seal-of-approval/

I like the formula of VCs helping to get as many companies going for $5-$15K as possible and as long as they all meet the criteria for having a strong proof of concept. From there it’s a numbers game and VC firms that that take the lead in this direction have closer relationships with prospective Series-A investments to the IPO all-stars. Reminds me of the old saying, “before you reap the harvest you have to first plant the seeds.” That attitude can help turn these trends around that you’re talking about perhaps.

Also I like your thought about how we don’t have a lot of coverage in the media regarding early-stage investing. We’ve been talking a lot at Knoxville Overground about this and are another few months away I think from raising and earning the money we need to launch a multimedia platform that can hopefully evolve into such a news source. I’ll keep you posted.

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