March 25, 2007
one result is here
March 12, 2007
Don Dodge has done some great analysis in his post Venture Capitalists and Angels invest $40 Billion per year but see only $18B in exits. The bottom line is that it appears that the relationship between investments made by VCs vs. the exits that have been generated suggest pretty significant losses (unless the market cap of VC portfolios is significant!). While it is difficult to match investments made with actual results, Don’s conclusions are difficult to argue with. There is probably a lot of accumulated value in VC portfolios that is not evident in the data yet, but there will have to be some pretty significant increased M&A and/or IPO activity in order to get positive multiples out of the industry (i.e., your average exits over time divided by your average investments needs to be greater than 1!).
Don’s analysis raises a some issues:
- Strange that every VC I talk with has great results yet the totals look so poor…how can this be?
- Is it possible that the market value of VC portfolios is multiples of past years?
- If the conclusion from this analysis is correct, how does the industry get back to equilibrium? Fewer VC firms? Fewer VCs at the firms? Less capital at the firms? More firms moving into private equity?
- Are the large companies seeing such low ROI from their investments in new technologies? If so, should they be doing less R&D and acquiring more, thereby allowing the VCs to fund their R&D?
- Do current VC portfolios (not taken into account in the analysis) represent such a large value that there will be a flood of exits in the next few years?
It should be an interesting next few years in the industry…
March 2, 2007
This Video is a pretty funny reminder of the difficult time that users have as they try to learn how to use your product! It brings up some very good questions:
- Is your UI intuitive enough?
- Do you have “help” built into the product to reduce the need for manual support?
- Do you have easy approaches for helping users get back to the “state” of the system that they understand how to use?
Thanks to Brian Styles for e-mailing it to me!
WebWorker Daily has two recent posts about how the internet is leading to many new ways of making money (a living?) through your browser. I can’t help but believe that they will have an endless stream of new pockets of opportunity to write about for years to come as the corporate value chain continues to offer APIs at different points in the chain for third parties to offer professional services through their browsers. The posts:
From a business perspective, how can you open up your value chain to third parties (via browsers) so that skilled individuals can contribute to your business on a full or part time basis? There are many great opportunities to extend and enhance your workforce!