VC's new normal

There's lots of concern in Silicon Valley that the recovery will take a long time and that the tech biz may never regain the levels of a few years back. Story in The Deal (via DealBook) is talking about a lot fewer venture capital firms funding a lot fewer companies.

It could upset the technology finance food chain -- the startup, the VC firm, the M&A adviser, the IPO underwriter -- in an unprecedented way, and make the establishment of a home-run, game-changing new company like Google a thing of the past.

Such naysaying has popped up before. Right after the 2000-2001 tech bust, there were those who essentially wrote off the Internet. Still, this time could be different - and it could upend the way tech upstarts have been financed.

During the first half of 2009, only six venture-backed companies went public. M&A stats are equally dismal: The value of tech deals announced during the first half of 2009 was roughly $58 billion, the lowest level for that period in five years. Partly because of this lack of returns from their investment portfolios, prominent venture capitalists have been predicting a shakeout among their ranks. Benchmark Capital's Bill Gurley, for instance, last month argued that the VC industry could be decimated as institutional backers, stung by losses, become far more conservative.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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