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September 7, 2006
Won't Get Venture Fooled Again
There is a solid Rebecca Buckman piece in today's WSJ on the continuing upheaval among Valley venture firms. It's definitely worth reading, in particular for the mention of my friend Brad Feld and the changes at his employer, Mobius Venture Capital.Silicon Valley is the center of an industry that research provider VentureOne says raised 24 funds of $1 billion or more in the boom years of 1999 to 2001. Some large funds haven't parlayed recent investments into lots of big hits and may face the music and wind down operations. Like Mobius, a few venture firms have made the painful decision not to raise new funds.Some of the venture gloom and doom is overdone, but there is no doubt that more funds are going to find themselves unable to raise money. The LP market gave a few branded long-timers passes for bad bubble funds, but that Age of Innocence is now over. While it might seem obvious, would-be venture investors need to step up with strategies that are more distinctive than simply being a different Sand Hill Road mail drop.
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Longish post on this topic here:
Mobius Venture Capital Getting Hammered in the News
http://www.brianberliner.com/2006/09/08/mobius-venture-capital-getting-hammered-in-the-news/
I have no idea why the firm is not raising another round.
My article perhaps wrongly assumed that it was because they were under-performing.
Perhaps it was because the GPs didn’t like working with each other?
Perhaps it was because Gary left?
Perhaps it was all of the above?
No matter. We will never know.
Paul, I'm curious: how much are Canadian VCs feeling this upheaval? Is it better in Canada? Worse? Too early to tell? Thanks.