Talk:Venture capital

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The definition on venture capital is incorrect according to related literature. Business sciences (McGraw, 1996) define it totally different. You need to verify your sources and citations based on applied business sciences. I am sure that you don't invest in any risk situation. This is one of the main reasons that start-ups don't receive venture capital. My experience with 48 high-tech start-ups as well the results of 10 years of applied business research "Research to Industrialisation" proof the statement as incorrect. I would prefer the definition as stated in the literature which is: Venture capital is no risk capital; it is a pool of equity capital that is professionally managed (McGraw and Hill; 1996). Venture Capital is rated as part of the formal capital market and not part of the informal risk capital market!

—Preceding unsigned comment added by 92.228.84.149 (talk) 10:08, 8 March 2008 (UTC)

I don't think the line "mostly in the US" is really well put. While it's true the the US certainly has the lions share of both venture backed startups and VC investment, I think "most" gives the wrong slant to it. Perhaps something more factual? "With the US receiving, on average x per cent of global VC investment".

The "international section" needs some work. I would like see the inclusion of a table showing the geographic spread of VC dollars for the most recent year available. Ideally this should be broken down by U.S. states, and then by international country, to show how much money goes to Silicon Valley companies (ie. California) and how much goes to NY and MA companies. Another idea would be to show breakdowns percentage by industry (tech, pharma, internet, communications etc.) There is mention in the article of the VC success "biggies" such as Amazon etc. Maybe a ranking chart of the best return VC investments. This would really help clarify for readers the whole concept of VC investment if there was a chart that showed: Name of VC, Company, Investment amount, Exit Amount. Percentage ROI.

I made the 8/7/2003 changes to the this page. I am an attorney with Wilson Sonsini Goodrich & Rosait, specializing in the representation of VC funds. Please direct comments to bmcdaniel (at) public (dot) myfastmail (dot) com

Nice work. Thanks. Could you review recent changes too? An issue with this article is that it is a bit too focused on the US/Silicon_Valley view.

Ann Winblad is probably the most quotable venture capitalist. This article could use some spicing up. Two things she's notably said is that a new idea is in the market 120 days after it is presented to any VC, period, no matter what kind of trust or legal documents exist. Many VCs just don't sign NDAs to avoid entanglements in ventures they aren't likely to invest in, all things considers (the 1/400 number comes from some studies of Silicon Valley VCs and that was actually during the boom). Another interesting thing that she says is that that it always takes at least five years to fully bake a company, no matter how much one tries to rush the process. By these standards most dotcom IPOs were - half-baked!

Some links to Red Herring and Industry Standard magazine would not be out of line, nor would a more technical statement of where the lines are drawn between venture capital and an investment bank.

The History section is correct in describing how the Glass-Stegall act separated the capital-investment and services functions of investment banks. Implicit seems to be the idea that, in the United States, venture capital serves the capital-investment role that is served by Investment banks in other countries. Although I'm only barely qualified to have an opinion, I'm not sure I would agree with this. It seems to me that companies that are sufficiently large to attract investment banking capital overseas would turn to the public markets in the United States. The public equity markets in the United States are famously deeper, more liquid and open to younger enterprises than foreign markets. Classic venture capital, at least in its pre-bubble manifestation, is really too small to attract the attention of investment banks, either in the United States or overseas. I think that venture capital, as a professional activity, is really confined largely to the United States. Overseas, capital formation on this small scale tends to be done by family, conglomerates or other non-specialized sources.

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After coming from Not_a_Number_Technologies I am finding it unclear whether 'Angel Investor' is another word for venture capitalist or is a venture capitalist of some sort.

"Venture capitalist" refers to professional, institutional partners in a fund. Sometimes wealthy individuals decide to invest in a company that is the kind that could be interesting to a VC. Such a non-professional is an "angel investor." There are groups and associations of such people, and sometimes they invest together. Sometimes a venture that was funded by "angels" grows and receives VC funding.

I've pruned the most well-known VCs list. There were a number of firms that showed up on that list that were not well known. I suspect that some VCs have been listing their own firms to promote themselves. I also removed Hummer Winblad, because although they used to be very highly regarded, the sad truth is that their investment returns after the dot com bubble have moved them distinctly below the other top tier firms.

I have tried to clean up this article as it had been annoying me for a while. Hope these changes are useful, but I would be delighted to see others further my efforts. Forgive my opting to make these changes (somewhat) anonymously, only it is a small & incestuous industry... --91.84.6.9 00:48, 5 January 2007 (UTC)

[edit] We should remove the section on "development"

The section titled "Venture capital as a financial tool for Latin American and Caribbean development" reads like an essay, and is irrelevant to the main thrust of the article. I'd suggest it be removed. —Preceding unsigned comment added by 83.217.109.242 (talk • contribs) 08:34, 31 May 2007

Yes, it does read like an essay, and is at times irrelevant. It is true, though, and the general point is relevant (that venture capital can be and is used as a tool for developing underdeveloped economies). I will shorten it drastically to something more appropriate and encyclopedic, and provide citations. -kotra 17:54, 13 June 2007 (UTC)
Sorry about the lag time. I shortened it to a few sentences as promised, but couldn't find any citations after a quick search. -kotra 05:44, 26 June 2007 (UTC)

[edit] Statistical data changed

Some statistical information was recently changed by an anon without a citation. I don't know which information is correct, because neither had a citation. I'm raising the issue here because it might be subtle vandalism. Or maybe it's a constructive edit, and I'm just ignorant (well, I'm probably ignorant either way).

Old text:

ARD's $70,000 USD investment in Digital Corporation in 1959 had a market value of $37 million USD in 1968.

New text:

ARD's $70,000 USD investment in Digital Corporation in 1957 grew in value to $355 million USD.

-kotra 19:06, 27 June 2007 (UTC)

[edit] Locator

I have found a VC locator: http://www.vclocator.com —Preceding unsigned comment added by Mac (talk • contribs) 14:17, 31 October 2007 (UTC)

I have found another source of venture capital information: http://www.venturedeal.comItsdono 21:29, 10 November 2007 (UTC)itsdono


Can anyone write about venture capital in Israel?? I know that Israel gets some of the most venture financing in the entire world. —Preceding unsigned comment added by 71.202.176.81 (talk) 21:17, 25 April 2008 (UTC)