VC Glass Half Empty! Half Full! Half Empty!

The VC glass is half-empty, or half-full, or something:

  • Number of venture firms shrank in 2006 (Forbes)
  • VC Fund Size Tops $200M For Second Straight Year (VentureOne)


  1. I find the malaise of the VC industry as noted in the Forbles piece disturbing when compared with the activity in the PE/hedge fund world. How is it that VCs can’t find new investments or LPs willing to put money to work, when private equity and hedge fund managers are funding all sorts of new deals often dwarfing what VCs do?
    For all the talk of web 2.0, when I look at the portfolio companies of most tech VCs they are still the mostly infrastructure, telecom, software, chip, and enterprise investments.

  2. I think this is a continuation of working off the “overhang” that hit VC’s during the last bust. Historically, the top 10% of VC’s accounted for 50% of returns (not sure of the exact number, but its a very skewed statistic). I see trend as segmenting the VC industry into the large global players (Sequoia, NEA) with billion dollar funds and the small, focused niche players with funds of $100M or less.