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Waarom venture capital niet zomaar herstelt
- OPINIE VAN GEORGES VAN HOEGAERDEN
8-12-2009 - Venture capital wereld
I saw an article a few days ago from an enthusiastic young General Partner (GP) declaring that “Venture is Back“ and it reminded me how frighteningly naive some people in the venture business are.
A naiveté that gives entrepreneurs (and Limited Partners) false hope. And we do not need more false promises in the venture business.
Believe me, I want nothing more than to leave this horrible decennium of venture behind and start a new one afresh, but I cannot get excited about the mere sound of a spinning engine that gets the car rocking back and forth. Frankly, the car is still stuck in the sand with spring breakers drinking the kool-aid and cheering it on.
Spinning the wrong wheels
I too see the statistics on the venture pace going up and down and depending on whose reporting of an in-transparent venture business you believe, you can pick your pill of the day.
But how fast Venture Capitalists spin their wheels is irrelevant to the performance of the venture business. And even how many deals are done and how many exits are produced is irrelevant. Short of any transparency in the venture business those metrics are poor derivatives to report on its ups and downs.
What matters is fund returns
But what really matters to Limited Partners is how much money goes into the VC fund and how much comes out at vintage (after the 7-10 year life-cycle of the fund). Only a fund return that outscores any other asset class a Limited Partner (LP) invests in, can count on receiving continued commitments that add to the growth of the venture sector. And the venture sector is far from growing.
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