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Amid Fiscal Uncertainty, Venture Capital Is Way Down In Silicon Valley

Posted by samzenpus on from the holding-the-wealth dept.

Hugh Pickens writes "With the 'fiscal cliff' just weeks away, Chris O'Brien writes that venture capital fundraising in silicon valley is down, the amount invested is down, the number of folks investing in venture capital is down, and the number of VC firms and partners are down. 'The people I talked to in the industry sounded grim even as they tried to make the case for optimism,' writes O'Brien. 'Still, it remains difficult to identify a clear path for turning things around for the battered venture capitalists who make Silicon Valley hum.' So what's wrong with the VC industry? The problems are many and complex but they can be boiled down to one thing: Not enough exits. For the size of venture capital being raised and invested, there simply aren't enough initial public offerings of stock or mergers and acquisitions to generate the returns that funds need. Venture insiders blame the global economic uncertainty. They believe that is part of the reason that giant corporations, which have amassed huge piles of cash, are just sitting on it, rather then using it to acquire startups. 'The numbers are way down,' said Ray Rothrock, a partner at Venrock. 'All these companies with these fantastic balance sheets, and nobody is really buying anything. With all the uncertainty they're facing with the economy and taxes, buying little companies is way down on their list.'"

6 of 421 comments (clear)

  1. Good. by zieroh · · Score: 0, Troll

    Good.

    --
    People who say "sheeple" have about as much sophistication as an AOL user, and in fact are probably actually AOL users.
    1. Re:Good. by feedayeen · · Score: 1, Troll

      Yeah, because taxes are SOOOOOooo much lower in Canada and the EU than in the U.S.

      Well...actually, yeah in parts of Canada they are. And if the $7b in taxes goes through at the start of next year happen, I'm sure those of us up in Canada will see American companies flocking to Canada.

      You know, 7 billion in taxes is only about 200 bucks to each Californian. How much do you think it costs a company to move out of a state even? My guess is that for a small company it'd be on the order of tens-of thousands, without factoring in training costs and lost profits during the transition.

  2. Elections have consequences by gelowe · · Score: 0, Troll

    Elections have consequences Do you blame them for holding on to thier cash reserves? With Obamacare looming and a president that has shown no understanding of how our current economic system works, these corporations can only predict that things will continue to worsen. They won't invest any of this money until there is some possibility that there will be a return. That probably won't happen in the next 4 years. Buckle up kiddies we are in for one hell of a bumpy ride.

  3. GOP Needs to Understand by EmagGeek · · Score: 0, Troll

    This is the time for compromise.

    Obama is willing to compromise, as long as he gets everything he wants.

    The sooner they realize that, the sooner we can move on to truly punishing the evil, greedy corporations that got us into this mess by creating booming economies over the years in the first place. Had the concepts of capitalism and big business never created the most prosperous Nation in the first place, we would not be in this mess we're in.

  4. Re:Oh no by Anonymous Coward · · Score: 0, Troll

    When your party can field candidates who don't believe the Earth is 6,000 years old, call me and we'll talk about my vote.

    Until then, STFU and pay your taxes.

  5. Re:He said asia/canada by thetoadwarrior · · Score: 0, Troll

    People like you should be barred from voting and procreating.