Where’s the Money? A Survey of Massachusetts Venture Capital Funds

Overview: It is no secret that venture capital is much harder to find than it was a year ago. With the drubbing taken by many funds that invested heavily in Internet based startups, and the disappearance of the market for initial public offerings (IPOs), the industry received a one/two punch. The first blow was negative returns on an industry wide basis for the first time in most peoples’ memory. The second was the indefinite unavailability of the liquidity option with the highest potential return on investment. The results for many funds were write offs and write-downs for many of their investments, and dramatically reduced prospects for showing early returns for surviving companies. Added to this has been the need to carry financially those companies, which had not reached breakeven, and long, hands-on hours trying to shore up the same companies. The two themes, which are most evident in the conversations, were a return to basics, and a heightened sense of uncertainty and caution. For the most part, a return to fundamentals is both inevitable and necessary - without it, funds will not be able to produce satisfactory returns, and the supply of venture capital would eventually dwindle.

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Format: HTML & WORD | Size: 127KB | Date: Jan 2003 | Pages: 7