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Forbes Column 08: Fund Envy

Posted on Friday, Apr 11th 2008

My new Forbes column, Fund Envy, follows up on the previous one, The Real VCs of Silicon Valley with more on the venture capital industry, and the consistent move of capital and expertise away from true venture capital to money management.

And once you have read the piece, apply the formula I offered to the exhibit below …

Here’s an excerpt from one of NEA’s press releases: “Practicing classic venture capital for over 25 years, NEA focuses on early stage investments, playing an active role in assisting management to build companies of lasting value. With $6 billion under management, NEA’s experienced management team has invested in over 500 companies, of which more than 150 have gone public and more than 200 have been acquired.”

NEA is a great firm, indeed one of the classical institutions of the industry. Precisely why they should be slightly embarrassed to utter “early stage” and “$6 Billion under management” in the same breath!

This segment is a part in the series : Forbes Column 08


. Connecting With Your Intimate Bot
. The Gap in Google's Defenses
. A Recession-Proof Corner of the Tech Sector
. eBay's Bounce-Back Opportunity
. How To Dig Out Yahoo's Treasures
. The Microsoft-Yahoo! Battle Plan
. What Microsoft Should Do While Yahoo! Dithers
. The Next VMWare
. The Smartest Unknown Indian Entrepreneur
. The Coming Death of Indian Outsourcing
. India - Cash Rich, Product Poor
. How to Save the World's Back Office
. Latin America's eCommerce Leader
. The Next Indo-China War
. The Real VCs of Silicon Valley
. Fund Envy
. Bootstrap Yourself
. The Coming Convergence
. Lighting The Way In India
. Hydro-Alchemy
. How Amazon Could Change Publishing
. A Technological Fix For Education
. How Technology Can Save Retailers
. Mobile Microfinance
. How To Heat Up Solar
. How Chip Toolmakers Can Survive
. Kill The Business Trip
. Water Firm Enlivens IPO Market
. Web-Savvy Authors Reap Fame, Fortune
. Peeking Inside the iPhone
. Bootstrapping, Montana Style
. Entrepreneurs Flock To Online Travel
. Silicon Lazarus
. Carts Ahead Of Horses
. Weapon Of Mass Reconstruction
. Barack Obama' s Finance Lesson
. Stimulus Package For Entrepreneurs
. Building A Smarter Corporation
. Deconstructing The Cloud
. 'SaaS-ing' Back At The Economy
. Web 3.0
. My Adventure With Amazon
. An S.O.S. To Silicon Valley
. OLPC’s Last Billion
. Capitalism Revisited
. Bargains For Private Equity
. President Obama
. Perilous Protectionism
. Healing Health Care
. Stop The Fear Epidemic
. Obama
. 'Edutainment' Needs Entrepreneurs

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Great analysis especially in the Forbes article. How about writing something about how these VC funds are formed — in other words, what does it take to make a cool 2.5% a year that amounts to nearly a million dollars a year by essentially just putting togther a fund?

regards,
Samir

Sam Saturday, April 12, 2008 at 4:49 AM PT

“Just putting together a fund” is not easy, Samir. In fact, it is extremely difficult. You can read my discussion with Brian Jacobs of Emergence Capital for a case study.

Sramana Mitra Saturday, April 12, 2008 at 10:13 AM PT

It seems to me that microlending sites could be stepping in to the early rounds of funding where the risk amongst family, friends…even strangers is lowered for everyone. Once the concept is proven to have legs, there is an argument for migrating towards VCs.

Lori Laurent Smith Saturday, April 26, 2008 at 8:27 AM PT

[…] Fund Envy […]

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