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Businesses The Almighty Buck

Amid Fiscal Uncertainty, Venture Capital Is Way Down In Silicon Valley 421

Hugh Pickens writes "With the 'fiscal cliff' just weeks away, Chris O'Brien writes that venture capital fundraising in silicon valley is down, the amount invested is down, the number of folks investing in venture capital is down, and the number of VC firms and partners are down. 'The people I talked to in the industry sounded grim even as they tried to make the case for optimism,' writes O'Brien. 'Still, it remains difficult to identify a clear path for turning things around for the battered venture capitalists who make Silicon Valley hum.' So what's wrong with the VC industry? The problems are many and complex but they can be boiled down to one thing: Not enough exits. For the size of venture capital being raised and invested, there simply aren't enough initial public offerings of stock or mergers and acquisitions to generate the returns that funds need. Venture insiders blame the global economic uncertainty. They believe that is part of the reason that giant corporations, which have amassed huge piles of cash, are just sitting on it, rather then using it to acquire startups. 'The numbers are way down,' said Ray Rothrock, a partner at Venrock. 'All these companies with these fantastic balance sheets, and nobody is really buying anything. With all the uncertainty they're facing with the economy and taxes, buying little companies is way down on their list.'"
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Amid Fiscal Uncertainty, Venture Capital Is Way Down In Silicon Valley

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  • Re:Oh no (Score:5, Interesting)

    by Anonymous Coward on Sunday November 11, 2012 @10:47PM (#41953593)

    ^ This

    Want to see a bank freak the hell out? Say the word deflation.

    Notice the Fed keeps inflation at a positive rate... When in the past 3-4 years it should have been negative. They instead pushed the peddle to the floor on inflation. Food/energy prices have nearly doubled. Yet wages have stagnated. Yet both of those are not counted in inflation yet are at the root of all goods sold in our country. It is because of the huge amount of debt the US gov has taken on. They want to erode that debt using inflation. But it can not be perceived as too high or you stall out investments.

    Most 'rich' hold a significant amount of debt. It is how they finance huge projects with little risk to their own real assets (stock, bonds, land, metals, companies). They win by a landslide in how much they hold. For example Donald Trump. May look like an idiot (a persona I think he is grooming) but is a rather shrewd guy who has many huge loans out there. Has declared bankruptcy many times. To get creditors off his back. Yet he is still very rich...

    Inflation is very real (and decently high at this point). My parents bought a house in 1970 for about 30k. That same house is now 'worth' 130k. My dads house payment was 130 bucks a month. Same payment today would be just shy of 800 a month.

    Take a couple of macro classes and you will see how amazing 'leveraged' the whole world is.

  • Re:Good. (Score:3, Interesting)

    by amiga3D ( 567632 ) on Monday November 12, 2012 @12:22AM (#41953997)

    Every time Ron Paul started talking about this stuff on the campaign trail he got booed and everyone promptly stuck their hands over their ears and went "lalalalalalalalala............." I hope it holds together 3 more years so I can cash my 401K out before it's gone. A lifetime of savings and those fuckers are going to cheat me out of it. The sad thing is it's all the fault of the American people who only listen to what they want to hear. This two party shell game is going to end soon and the public will discover that no matter which shell you flip there is nothing under any of them.

Executive ability is deciding quickly and getting somebody else to do the work. -- John G. Pollard