Time Catches Up With Technology VCs

It appears that reality is catching up with the Venture Capital industry – albeit slowly. While similar numbers of deals are being done to ten years ago, the IPO window is firmly closed (to use a VC cliché).

Average Time to IPO
1998    3 years
2008    9 years

Number of Companies Funded:
1998    1,896 ($14.0B invested)
2008    1,930 ($14.1B invested)

The technology diffusion model we use at Cientifica assumes a tortuous 10-15 year path to get anything from the lab to the market. Given that most of the VC deals in this data set will have been Web 2.0, social networking etc rather than pure technology, it look as as if our numbers are about right, although the VC industry still isn’t set up to deal with investments over this timescale and will be continuing to be driven by M&A based exits (alternatively you can think of many of them as being fire sales or write downs)

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