A VC Model for the Recession
Todays economy means venture capitalists and private equity firms must map a new course.
By Richard S. Garnick, The ConJoin Group
Our economy relies on a steady stream of venture-backed companies, who collectively produce more than one-fifth of the US gross domestic product. In fact, public companies that were VC funded currently account for more than 12 million U.S. jobs and $2.9 trillion in revenues. Research firm Global Insight estimates that 92 percent of job growth at these companies occurs once the company enters the public market.
However, economic uncertainty, and an adversity to risk has substantially reduced the IPO pipeline, and broken this cycle. Instead, VC-backed companies today are currently struggling to maintain cash sufficiency, which leaves investors holding the bag.
The problem is investors have abandoned long-term strategies in favor of short term returns, and this shift to much more conservative investing is stifling innovation. As a result, investors may well be passing up on what could be the next Google or Facebook. In order to survive, VCs need to re-think how and where they can help their portfolio companies remain innovative and profitable in the current economy.
Read more >>
Is Bigger Better?
Nobody ever got fired for buying IBM or did they? Joe Ruck of BoardVantage looks at the differences between buying from a megavendor and a startup in this post to the SandHill.com Blog, New Thinking, New Era.
Decisions Can Be Murder
Kathleen Schuab of Sybase looks closer at why making tough decisions builds character and brings success in this post to the SandHill.com blog on innovation strategies.
Publish Your Perspective!
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DONT MISS: Is China Recession Proof?
A panel of leading Chinese economists explains how the worlds fastest-growing economy keeps expanding despite the global downturn. Read more in this article from The McKinsey Quarterly.
The Week in Review: Ka-Ching!
Software development budgets are growing?! Plus, PPM explodes, a tipping point, a garden, and stealth start-ups. Read the SandHill.com Week in Review and get all the news stories that shaped the software industry over the past week.
Poll: Future of VC?
Can the traditional VC model survive the recession?
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Last week, readers voted on whether better training can really improve sales.
Give us your opinion and see the results >>
More at SandHill.com:
Oracle spent more than $1.3 billion lobbying the government during Q2.
Read the most important enterprise software industry news of the week >>
Cloud vendor OpSource received $4 million from ATEL Ventures.
Monitor the latest software venture capital deals >>
Intel acquires two software firms.
Size up last week’s software M&A deals >>
P. Kevin Kilroy was named president and CEO of I-many, a contract lifecycle management vendor.
See who’s made it to the top in our list of recent software executive appointments.
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