It is also worth noting that this follows a major drought in enterprise startups. I don't have the numbers (you might know) but enterprise startup activity took a gigantic dip after the 2000 crash when large enterprises en masse all but stopped buying new enterprise technology from new companies.
Looking at 2013 exits (or financings) is missing the mark. VC is a game of 1000x returns. And those returns have come from companies like FB, Google, etc. Most of the value of YC's portfolio come from Dropbox and Airbnb. All of these companies are decidedly consumer companies.
Sorry if my point was not clear. The article suggests a new insight into the venture landscape by A16Z given their shift away from consumer startups. Just trying to point out that the shift has already happened among VCs towards enterprise so this is not new.
Whether enterprise is a better area for VCs or not is a separate argument.
This is only true if you blindly ignore the fact that enterprise customers are willing to give them money because of their consumer backing. If consumers backed away from FB and Google, their enterprise customers would be following them out the door. Clearly this makes them consumer oriented businesses.
That's not true. Today, a lot of funds, particularly larger ones, are placing bigger bets on companies in later rounds, which is arguably a smarter strategy than trying to place lots of small bets earlier in the hopes that you'll get lucky and discover the Facebook or Twitter and have put enough into it to make your big percentage return a big absolute dollar return.
Taking Twitter as an example, its last round of funding in 2011 reportedly entailed a $9.25 billion valuation according to PitchBook. If its valuation at IPO is north of $20 billion, as some expect, the investors who poured $400 million into the company in 2011 would more than double their investment. If you look at Twitter's S-1, a lot of the biggest stakeholders were investors in Series C and beyond.
"...placing bigger bets on companies in later rounds, which is arguably a smarter strategy..."
Is it necessarily a smarter strategy? To me just seems this is the latest swing of the pendulum up and down the risk/reward curve. If factors change in 5 years, their "smart strategy" could begin to include more emphasis on consumer A's.
It's a smarter strategy at times I would say. For example, when the Fed is intentionally inflating a stock market bubble ala right now. That provides an excellent window to ride the public market to massive valuations completely unsupported by fundamentals (eg LinkedIn, Tesla, Splunk, Twitter, Facebook etc).
It's all fun and games until the stock market crashes again.