WSJ: VCs Reducing Appetite for Risk
In an article published today (Venture Capital to Suppress Its Appetite for Risk in 2013), the Wall Street Journal reports that venture capitalists have dramatically lowered their appetite for risk, reducing the power of Internet entrepreneurs who are seeking funding.
The article notes that:
- In light of disappointing stock-market performance of Facebook, Zynga and Groupon, VCs are investing less in consumer Internet companies.
- During the past year, valuations have gone down significantly.
- On a quarter-over-quarter basis, the number of deals, the amount invested and the percentage of “up” rounds all have declined.
Need an Angel Investor? Consider AngelList
AngelList Logo
There are plenty of companies seeking seed-stage financing, and plenty of seed-stage investors. How can they find one another effectively? AngelList is one answer.
Started in February 2010, AngelList is a straightforward application of social-media principles: (more…)
WSJ: Super-Angels Fill Funding Gap
Many startup companies are betwixt and between when it comes to funding: They need too much for angel investor groups, but too little for venture capitalists. According to the Wall Street Journal (‘Super Angels’ Alight), there is a new breed of investor that fills the gap, the “super angel”.
What makes these angels “super” is their ability to attract other investors. Whether collaborating with one another informally or through recently-formed funds, they can invest $1 million or so and be satisfied with an exit a few months to a few years later.
Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.
WSJ: VCs to Resume Funding Startups in 2010
In an article published today (After Dry Year, Start-Ups Are Poised to Get Cash), the Wall Street Journal reported that venture capitalists will resume funding startups in 2010.
The major reasons for this development:
- During much of 2009, VCs were hoarding cash to protect their existing companies. With the economy and the stock market stabilizing, VCs are returning to investment mode.
- Whereas initial public offerings were almost nonexistent this year, investment bankers see IPOs returning in 2010.
Some additional points made in the article:
- During 2009, the vast majority of the (modest) VC investment that did occur was in information technology or health care.
- For 2010, VCs are looking for opportunities in social networking, mobile technology, health-care technology, and clean technology.
Related posts:
- Realistic Financing Options for Startup Companies
- VCs Pleased: Signs of Return to Normalcy
- Need Funding? WSJ Offers Tips to Gain Credibility
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.
Investor Due Diligence Redux
On July 2, I posted Investor Due Diligence Should Go Both Ways. The thrust of that post: Founders should conduct due diligence on prospective investors just as investors conduct due diligence on founders.
In a similar vein, I just read Make Sure Your VC Isn’t A Jerk by Mark Peter Davis of DFJ Gotham Ventures. Well-written, succinct and worth reading.
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.
