Wrap up: The New Rules of Tech VC, the Fiction of 20% and VC Innovation

Posted on October 4, 2007

There was a lot of great discussion today about VC so I thought a quick wrap-up was in order. Normally I’d write a full post but the three posts I will briefly touch on below did such a good job I will simply suggest you read them. Here it goes:

The New Rules of Tech VC - Alex Iskold on Read/Write Web

Alex put together a post on RWW today that looks at VC both past an present. He takes readers through the old model, why it worked and why it is changing. He then looks at the current state of VC and to the future of what things may come down the road. Here’s a snippet from the post about the future of tech VC:

Now, putting it all together, leads us to conclude that large venture money is going to migrate away from technology. Specifically, this is what is likely to happen:

  • We will see more smaller size funds and they will be successful
  • Large firms are going to focus on series B deals and will have to pay premium for the same equity
  • Big firms will focus less on tech, shifting to alternative energy, healthcare, etc.

It’s a great article even for those who know a lot about the VC world.

The Fiction of 20% - Fred Wilson on A VC

Fred takes readers through why VCs saying that they have to own 20%, 25%, etc. of a company to make a venture return is simply hogwash. Good stuff from one of the more innovative VCs around.

The Changing Landscape of Early-Stage Investing - Fraser Kelton on Disruptive Thoughts

Fraser has a nice high level wrap-up of innovation in the early stage VC space and adds some of his insight which is always valuable. I am glad Fraser is moving to NYC in January for Adaptive Blue. We’ll be able to finally take our virtual conversations about early stage VC and entrepreneurship offline.

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3 Comments so far
  1. Fraser October 4, 2007 7:19 pm

    Thanks for the kind words :)

    I’m counting down the days until the move! It definitely will be nice to meet, and I suspect the conversations will only grow in intensity as we both help build young companies.

    (it’s Adaptive Blue, not Adaptive Path, although I wish them well too)

  2. Fraser October 4, 2007 7:24 pm

    ps - go bosox

  3. Eric Olson October 4, 2007 10:51 pm

    @ Fraser

    Dude - totally sorry on the company name… I was a little tired when I whipped that piece up. My bad.

    See you in NYC soon!