Friday, November 15, 2002

Fortune: Too Much Ventured Nothing Gained ...Now consider the pickle in which the industry finds itself. Venture funds run ten years. To earn 18% annual returns for their investors--the low end of historical venture capital returns--the funds would have to create $1.3 trillion in market value by selling or taking public their portfolio companies over the remainder of the decade. Think about it this way. eBay is one of the few successes to emerge from the dot-com boom. At its peak, eBay had a $16 billion market value, and its venture backer, Benchmark Capital, made more than $4 billion on its investment. So how many eBays would have to be taken public by the end of a decade for venture investors to achieve 18% returns? More than 325. That's roughly one eBay every 10 days between now and 2010. Obviously that's not going to happen... So, is it good ideas chasing money, or money searching for good ideas? 11:12:53 AM

Funny! I think I posted a blog item about an idea like this, but of course, until I can find it in my own blog and put a link to it here, you won't believe me. I don't blame you... 11:04:58 AM