Venture capital firms, like many other businesses, are experiencing a decline. As many of these firms are closing out funds associated with the dot com boom, they are not starting new funds to replace them. Investors are hesitant and available capital is dwindling. Nevertheless, the top venture capital firms are still investing, but they realize returns may not be as lucrative because they are coming from acquisitions more than initial public offerings. The article profiles the top ten venture-backed companies and offers a link to a table with the top fifty backed companies.
- Examine the top ten venture-funded companies (included in the article). What do you notice about the founders? What inferences can you draw about the characteristics of founders associated with successfully funded startup companies? [Note: a random look through the top fifty venture-backed companies should produce the same effect.]
- Does your investigation of these top funded companies suggest the presence of a glass ceiling in entrepreneurship? Why or why not?
- Discuss the options for financing a new venture. What are the pros and cons of venture capital? What are the risks and returns for venture capital firms?
SOURCE: P. Tam, “Venture-Capital Firms Caught in a Shakeout,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052748703915204575104221092909884.html)