An article in today’s Wall Street Journal illustrates the effect the credit crunch recession is having on Venture Capital portfolios. John Steuart, a Claremont Creek managing director is quoted as gleefully saying “The portfolio is competing against itself and it’s survival of the fittest. It’s brutal”
Here’s the problem for all of those game changing nanotech companies still struggling to find a market…
Many venture-capital firms, which put money into start-ups with the aim of profiting when those firms go public or are sold, are going through a similar Darwinian exercise of sorting through their potential winners and losers. While the venture business enjoyed something of a revival in the past few years, the financial crisis has slowed the spigots of cash going into the sector. It also has crimped returns by damping the market for initial public offerings of stock and for mergers. Meanwhile, many venture-backed start-ups are getting hurt as demand for their products shrinks.
Given that the world is now realising that much of the financial world has been run by buffoons who didn’t have a clue what was going on or they were investing in, I think that there might be some decent value to be had here. The same people who invested in technologies without understanding a thing about them will now be selling them off, so the opening offer of any skilled negotiator should be “See these five magic nanotech beans….”