Forum Archive Index - October 2000

["Ben Dutton" <bendutton@sharechat.co.nz>]

Peter,

 

That's a great article from Fortune.  Following on from it, you and others may be interested in the following story by Adam Lashinsky on TheStreet.com - a very perceptive piece of writing on the trends of Venture Capital...

 

"An item here Tuesday suggested that savvy investors can learn about future problems in the public market by paying attention to me-too behavior in the private market. In other words, because venture capitalists pile into the same things at the same time, you can tell not only what will be the hottest sectors for IPOs (assuming there is an IPO market), but also where the inevitable pain will follow. That's because, as VCs overinvest in start-ups, they have to rush them to market, thereby saturating the public market and leading to an eventual collapse of the house of cards they've built."

 

For more go here:

 

http://www.thestreet.com/comment/siliconstreet/1132801.html

 

Best Regards

 

Benjamin Dutton

 

----- Original Message -----

From: P Maiden

To: sharechat@sharechat.co.nz

Sent: Monday, October 23, 2000 7:39 AM

Subject: [sharechat] Venture capitalists

A really good article for those interested in venture capitalists.

 

Obviously some people make a lot of money on the way through but at the end of the day most of the ventures cost investors dearly.

 

We all hope that ITC and EVC and the like are more cautious.

 

The higher the risk the bigger the rewards - but how many of the real winners does the man in the street actually get a share.

 

http://www.fortune.com/fortune/2000/10/30/vcs.html

A bit of a teaser to the contents.

"For those companies, IPO mania has returned. Corvis, for instance, a three-year-old fiber-optic equipment maker, went public in July with absolutely no revenues and is valued at $20 billion, netting a combined $3.5 billion for Kleiner Perkins and NEA. Oplinks and ONI Systems went public with $30 million and $16 million in lifetime revenues, respectively--and millions in losses--and are worth $5 billion and $7 billion. The VCs smiling from those deals? Kleiner Perkins (which made $820 million), Mohr Davidow Ventures (almost $900 million), and Crescendo ($1.2 billion).

It's starting to feel like the dot-com era all over again. "There's the same presumption that all optical deals will be successful," says Hoag. In six months, according to Venture One, 124 optical networking companies have been funded"

Peter