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Thursday, Sep 24, 2009VC delusions
Posted by dgore
GRAZIADIO IN THE NEWS
Speaking to Forbes, Pepperdine Private Capital Markets Project lead researcher John Paglia discussed how his research revealed a gulf between venture capitalists’ expected and actual returns on investment.
Reporter Rebecca Buckman wrote:
VC firms’ expectations about time horizons for M&A and IPO deals were realistic, Paglia’s data shows. These guys know that it’s taking longer to sell a company or take it public these days, which hurts their returns.
What they don’t seem to understand is how the recession is curbing sales at venture-backed start-ups. For nascent and more mature start-ups, VCs’ expectations about sales multiples were far greater than the actual multiples achieved by companies in their last funds.
It’s also possible that VCs, Buckman wrote, many of whom fancy themselves captains of the Silicon Valley universe, may have an inflated sense of their own intuition and business smarts. [Full Article]
Source: Forbes
Related posts:
- Venture capitalists rely heavily on ‘gut feelings’
- Shining a light on venture capital
- Pepperdine University national study shows private capital providers have very high expectation for return on investment
- Venture capital firms still optimistic about fund-raising
- Venture capital, still seeking the next big thing
Category : In the News | Paglia
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