Saturday, March 18, 2006

VC mood in Silicon Valley

Sramana Mitra writes:
In 2006, the classic venture capitalists have pretty much shunned the notion of risk capital, in favor of growth capital.

Today, there is a lot of activity in very early-stage, built-to-flip venture capital, where from the get-go, the assumption is not to build a company, but to focus on making a quick million or two.

Finally, the entrepreneurs out there who have the ambition to build a real, large, multi-billion dollar company - should know that Silicon Valley has changed fundamentally. Highly speculative, capital intensive deals that require 5-7 years to build, are less popular these days. Especially, if you have a contrarian, one-of-a-kind business idea that goes against the grain of the prevalent trends, investors will ask you to find ways to either diminish the capital requirements, or reduce the startup risks.

Your answer may well lie in that category of “Built-to-flip” or “Built-as-an-accident” deals, from which you weave together a Venture Buy-Out quilt.

Tags: startup, funding, software, entrepreneur, venture

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