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Sean Parker (now a VC) speaks out about venture capital’s broken model November 23, 2010

Posted by Jim Price in Business, Entrepreneurship.
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You saw him (or was it Justin Timberlake?) in “The Social Network.”  Now check out this interview of Sean Parker in the New York Times http://dealbook.nytimes.com/2010/11/22/a-dim-view-of-betting-on-start-ups/?hp

This article picks up on my post of Nov-2 (https://jimprice.wordpress.com/2010/11/02/vcs-10-year-returns-have-gone-negative/) about industry-wide VC returns going negative.

I don’t know if this dude would be my drinking buddy, but I can’t help but agree with his take on where the VC industry is headed.


Sarika Gupta’s game startup has a winner in Telegruv November 13, 2010

Posted by Jim Price in Business, Entrepreneurship.

The other day, I was catching up over coffee with Sarika Gupta, Ross MBA 2010.  She were showing me  Telegruv, the very cool new game that her startup, Dance Telephone, Inc., is just launching on the market at the Toy & Game Fair on Nov. 20-21 in Chicago.

You know the telephone party game, where you whisper something to one person, she then whispers it to someone else, who whispers it to a third individual and so on, until you discover at the end of the chain just how contorted the original phrase has become?  Well, instead of whispering a phrase that’s passed along, in this game you demonstrate a dance move that the next person has to repeat, and so on.  It’s simply and beautifully executed, and it looks like it would be a riot to play with a group of friends.

As CEO of this startup, Sarika has moved quickly and decisively to get her first product out the door in time for the holiday season.  Check it out and purchase copies at http://www.telegruv.com.  I think she has a winner.

VC’s 10-year returns have gone negative November 2, 2010

Posted by Jim Price in Business, Entrepreneurship.
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In the late 1990’s and early- to mid-2000’s, a lot of folks who had no business getting into venture capital started firms and succeeded in raising funds.  Entrepreneurs and even inexperienced MBAs who thought it looked like an fun and easy way to make big bucks launched new venture firms and suceeded in raising funds. 

Meanwhile, a number of the top-performing, experienced venture firms raised new funds that were much bigger than their previous funds, ruining the economics of venture investing.  Whereas before, they’d been placing perhaps $5-15 million bets on any given startup, managers of these new megafunds were now forced to place $50-100 million bets.  (YOU try getting a 4x to 10x return on a bet like that.)

So… at long last, the chickens have come home to roost at the vultures’ doorstep (sorry — I couldn’t resist). 

The National Venture Capital Association just announced that the closely-watched Cambridge Associates U.S. Venture Capital Index 10-Year Return for the 2nd quarter was -4.2%, following a first-quarter 10-Year Return of -3.7%.   (see http://www.marketwire.com/press-release/Venture-Capital-Returns-Decline-Moderately-in-the-First-Half-of-2010-1344475.htm

That’s industry-wide.  That’s sucking wind.