Why Venture Capitalists Aren't Investing
from the are-they-or-aren't-they? dept
It's funny that over the past few months you hear completely contradictory stories about whether or not venture capitalists are actually investing in this market. What my venture capitalist friends have told me is that publicly they say "of course we're investing - we're investing like crazy", when the reality is that they haven't come across a startup they would touch with any amount of money. Businessweek has an article explaining why no one is investing even though many factors say now is the right time. VCs have more money than ever, there's less competition in various markets (and for deals), it's much easier to hire highly skilled people (though, I imagine many of those people are a bit gun shy on venture backed startups). The problems are that VCs see that the public markets aren't an exit strategy right now, acquisitions are down, and it's unclear when, where and how corporate markets will ever get around to spending on technology again. These things scare the VCs into making very few deals. Seems like a silly move to me, as now would probably be a good time to place a few bets on the cheap side.
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