Is Early Stage Investing Going Strong Or Not?

from the disagreements dept

Just a couple of weeks ago we had an article about how investors who were focused on early stage investing were doing great. They were seeing lots of interesting deals at low valuations, and definitely thought it was worth taking some bets. But, over at Business 2.0 someone there has announced that it's impossible for companies to raise early stage financing because venture capitalists only want to do later stage deals now. This second article doesn't give much proof, but makes a bunch of assumptions as if they were facts. Seems somewhat similar to a couple of articles we posted in back in February. From what I've seen it seems that investors are focusing on what they know (early or late stage) and certainly are being somewhat more demanding in their due diligence, but it is still possible to raise money. Of course, saying that is a lot more boring then announcing that it's impossible for "three guys in a garage" to raise any venture money these days. Isn't the press wonderful?
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  • identicon
    Anonymous Coward, 8 May 2001 @ 3:11pm

    impossible? aren't we being a little melodramatic?

    i screen early stage deals for a group of angel investors and it's tough to justify taking on the risk of a startup in a market where you can buy Cisco at $16. with that said, dealflow is better and institutions in my network are still cherry picking early stage investments. the article was kind of ridiculous because early stage investing isn't fundamentally about first-mover advantages. in fact, a lot of people I talk to argue that 'first-mover advantage' is a myth. there are a lot of first movers that got killed because the timing wasn't right or the next mover was just better. (think pen-based computing.)

    link to this | view in chronology ]


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