Paul Kedrosky writes about a NVCA report which discusses the investment profiles for venture funds in Q1-2005. The interesting part was that first-time venture funds are at an all-time low in raising funds. First-timers comprise just 12% of all venture funds in the industry.
This sort of worries me - because this figure has gone down from approximately 40 %. Paul has justified that this is because focus is on quality and demonstrable returns. I am worried that this is a general indication of trepidation in the venture capital industry. New funds like Octopus Management's "Eclipse" won the Investor All Star awards in Dec. 2004, but clearly performances like these have not swayed investor attitudes.
Attitudes like this percolates down to the fund itself, in its search for ventures. As Clayton Christensen puts it - "resource dependence", the majority of a company's resources go to satisfy its biggest customers/investors. Does that mean that I cannot do anything, unless I know a John Doerr??
On the other hand, John Doerr himself is hiring "gurus" in their management. Randy Komisar is, among other things, a professor at Stanford. What this means, he is in close contact with brilliant people, none of whom know how to write a truly good business plan, but will have a great Google inside them. Will there be another Bill Campbell to coach them?