
Venture Capital's Coming Collapse - jaydub
http://www.forbes.com/forbes/2009/0112/066.html?partner=daily_newsletter
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jhancock
"Menlo Managing Director H. DuBose Montgomery says the 1999 fund “has not
completed its performance cycle and has several promising portfolio companies
with large revenues, which are still private.”"

If this is true, maybe part of a solution is for fund investors to not have to
wait for an IPO or acquisition in order to start receiving a return?

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mtw
I don't see how they can get a return if there is no IPO or acquisition. The
main assets of a startup is the technology, the IP, the business plan, the
executive team as well as the staff, consumers & customers, which are not
liquid. I've heard about specialized stock exchanges for startups (there's one
in ontario), but apart from that, i don't see any solution.

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ojbyrne
Dividends? Though the quote doesn't actually mention large profits, just large
revenues.

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fallentimes
Dividends, especially with the current capital gains tax rates, are a
wonderful solution. This assumes your investors can be patient enough to
receive them.

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jhancock
I think dividends are interesting for certain classes of startups,
particularly during downturns. In boom periods, VCs follow the "dumping"
principle. Dump your product for free to as many users as possible to get
market share and drown out competitors with a lessor war chest. In a downturn,
there should be less of this and more opportunity for businesses to focus on
traditional evolution; i.e. getting to profits.

Perhaps we need a new class of VC to accomplish this. Invest in sizes more
like an angel but with clear nearer-term profit agenda.

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arghnoname
These sorts of of articles are never a good sign since in any ponzi^H^H^H^H^H
investing scheme, delusion^H^H^H^H^H^H confidence is important. These kind of
articles reinforce the reality they are describing, at least, they have the
potential to do so.

