Fairy Godmother Rachael Herrscher of Today’s Mama writes: I was sent this interesting article by the p
resident of Utah’s CFO Solutions – a very smart guy!
If you are looking to raise cash in todays economy I think this is a good read to give you some perspective into what is on VC’s and investors minds and how the game has changed over time. Check out ”Another View: V.C. Investing Not Dead, Just Different”
I don’t know many businesses these days that are focused on going public rather I think most have the focus of an M&A deal at some later date in business so I think many of us our have our eyes set on the right horizons. A good quote from this post:
“I believe that the paradigm has changed for the venture business. We can no longer realistically expect the same kinds of absolute returns that were achieved in the past through a quick turnaround from start-up to liquidity through an I.P.O. Rather, I believe that most of the companies that venture capitalists are funding today will find an exit through merger or acquisition. And if we expect to achieve a return in a reasonable time frame of three to five years, we are probably looking at a sale price of $20 million to $100 million. This is the valuation range where most young companies are being acquired.”
In general it’s good to hear some upbeat perspectives and outlooks in the world today so I especially appreciated his closing statement:
“Venture capital is definitely not dead or even ill; rather it has just taken on a new set of dynamics. Entrepreneurs in this country are stronger than ever, and venture capitalists are the ones to nurture them!”
