Sick Venture Capital ... And, Why It Matters

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Please see post below forwarded to us by MedTech-IQ member, Dean Calcagni ...

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Sick Capital
Why it matters that VCs won't do their jobs.

By Jason Pontin

If venture capital is sickly, does it matter? Put another way: would the startups in the TR50, Technology Review's new list of the 50 most innovative companies, be more innovative and sustainable, or even different, better ventures altogether, if venture capital were healthier?

Venture capital isn't what it was. Funds launched in 1996 and 1997 have seen returns of 80 to 100 percent on average, according to Cambridge Associates; those launched in 1999 and 2000 have lost money.

Since then, many have returned less than zero, and only recently has the industry showed signs of life. In "What's Wrong with Venture Capital a href="http://www.technologyreview.com/business/24565/?a=f">http://www.technologyreview.com/business/24565/?a=f>", James Surowiecki writes, "As Fred Wilson, a principal at Union Square Ventures, bluntly puts it, 'Venture capital funds, as a whole, basically made no money the entire decade.' " What went wrong? The reasons are summarized by Surowiecki (and by Howard Anderson, cofounder of Battery Ventures, in "Good-Bye to Venture Capital," June 2005 and at technologyreview.com).

Full article at:
http://www.technologyreview.com/business/24557/

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