Dot Com Shakeout May Help VCs
from the oh-really? dept
Back in April as the dot com downturn started I pointed out that VCs were actually happy about it since they had a lot of cash and it would allow them to force lower valuations on their investments. It only took seven months for someone else to notice that as well. I think it’s going to be very interesting to see how the venture capital industry is forced to change over the next year or so. They have a lot more money and fewer chances of making money, so they’re going to start making some bigger bets to protect the few companies they believe in. I think it may open up more space for smaller investors to take more risks, though many of those investors have been running scared due to inexperience. So, I think we need smaller investors who are more willing to support companies as they grow, rather than force them to sell out as quickly as is humanly possible.