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Venture Capital 2.0

I will be blogging some more about venture capital in the next couple of months.  In the meantime, there has been an increasingy bit of chatter about the changing world
of Venture Capital.  Call it "Venture Capital 2.0."  The current model is not unlike
the entertainment industry where returns occur within a firm’s portfolio from
a few winners.  In addition, just like the ever-growing squeeze of the middle-class
in the US;  there is an ever-growing discrepancy between the returns from the
"best" firms verses the also-rans.
Michael Butler, chairman and CEO of investment bank Cascadia Capital, recently wrote
an interesting piece called The Death and Re-Birth of Venture Capital.

If you ask ten different entrepreneurs about venture capital, you will bet many
different responses about the importance of it (how much you should take and when, valuations, etc).  I do think that we’ll continue
to see the increasing trend of earlier stage companies bootstrapping their ventures.  It is just a lot cheaper to start a company with the advent of open source software and enterprise
class Web services. I tend to think that the correct answer is actually better answered
by the type of business it is and the style of the entrepreneur. 

So what do you think?  Are the top firms going to corner the market forcing the other firms to verticalize and specialize on a region or a category?   Are you running a venture that has opted to not take venture capital?


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