Blog Roundup: Discussion of TechCrunch post on the decline in VC returns

TechCrunch Blog Post: Ten-Year Venture Capital Returns Continue To Slide

(Source: Cambridge Associates LLC via TechCrunch; The crude annotations are mine.)

Ouch.

There are lots of problems with this 8.4% 10-year rolling average return for venture capitalists in the US.

The big one, of course, is that when VC returns head into the 8% range, institutional investors who might otherwise plow an obligatory 1% into VC firms to cover their “alternative” category, start looking for less risky investments with similar return profiles.

And if those institutional investors start to go away, you end up with smaller VC funds and a big gap develops in the middle of your investment cycle, as it did  from 2001 to 2003 – between the seed investors involved in early rounds and the larger, later-stage VCs, private equity funds and strategic industry investors who might participate in later rounds.

Of course, this should be a temporary problem: This is a rolling average and low returns can’t last for much longer, can they?

Or can they? (more…)

Recent post I like from a marketing expert and friend: 5 Reasons your customers don’t listen to you

5 Reasons your customers don’t listen to you | The Invisible Marketing Blog

These are all right on target.

I always read this stuff and think, “Geez, I need to edit my websites…” That’s a definite sign of a useful post.

Blog Roundup – A good post on why stealth mode doesn’t work… If you have a tech startup, read this!

Stealth Startups, Get Over Yourselves: Nobody Cares About Your Secrets

Great post from David Carr about the future of traditional print media – newspapers, magazine, books

Great post about the changes in print media by David Carr, media commentator for the NY Times:

The Media Equation – For Media, a Sunset Is Followed Quickly by a Sunrise – NYTimes.com

This lack of due diligence amazes me: Canopy Financial was allegedly a sham.

The short story is that a prominent start up financial services firm allegedly faked their audits and raised about $90MM in funding from VC firms over a couple of years:
Canopy Financial Accused Of Serious Financial Fraud, Investors Burned

Canopy Financial Turns Into Sad, Comical Game Of Hot Potato

As an active investor, entrepreneur involved in fund-raising and co-founder and officer of a financial auditing firm, this kind of story just makes me cringe. Leaving the validity of these accusations aside, running a good due diligence checklist is critical.

(more…)