1. Trends in the Venture Capital Industry Evangelos Simoudis, Ph.D. Managing Director Trident Capital [email_address] Blog: blog.tridentcap.com Twitter: @esimoudis
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Notes de l'éditeur
… scalability is crucial, and companies should be open to any forms of mergers (both buying and selling) for start-up tech financing must change, as most won’t require more than $2 million (despite larger and larger funds)… 10x cheaper to start an Internet business now than in 1999 Operations: decrease engineering headcount, determine the absolutely necessary product features, cut lagging marketing, create accountability for sales (commissions), encourage realism on pipeline, cut underperforming departments, defer payments – MOVE FAST For CEOs – raise necessary funding as soon as possible, aggressively pursue M&A for critical mass, be realistic on valuations, understand that VCs have the negotiating leverage
Venture industry doomed by an overinflated sense of self (i.e. the industry is critical to entrepreneurship). In fact, the opposite is true as only 0.2% of the estimated 600K businesses created in the U.S. each year obtain venture financing
, with $100+ million raises nearly out of the question as the fundraising model for capital-intensive businesses is broken, even among clean-tech businesses (which now favors smaller asset models such as energy monitoring) Even if there is a shift towards lower-cost Web 2.0 startups, these do not have the same kind economic/macro productivity impact as their tech bubble predecessors … need a catalyst to jump-start, particularly among VC-backed companies: federal encouragement, bigger VC bets, more focus on R&D (BEFORE it becomes mainstream) rather than mindlessly following the herd… Money continues to flow into software and infrastructure designed to outsource hardware and IT from enterprises (“cloud”) The iPhone/Blackberry smartphone revolution continues to produce mobile content at an exponential pace… but investors remain cautious of ad-based businesses… “content is over-invested, but hardware is under-hyped” As healthcare remains in the public spotlight, there still remains opportunity to revolutionize the industry through technology… recent examples include streamlining bank/insurance processes for health paymen