What Happened to Venture Capital? UBC Sauder School of Business

BY Basil Peters

This was a lecture to the MBA Entrepreneurial Finance Course at the University of British Columbia Sauder School of Business.

Here’s what happened to the Venture Capital industry:

  • Intel, Microsoft and Cisco aren’t making money for their shareholders
  • Or, more importantly, for their employees
  • That’s part of the reason the best and brightest are now working in startups
  • Big companies have lost their ability to innovate
  • Their strategy is now to acquire innovative, entrepreneurial companies
  • Google’s sweet spot for acquisitions is $20 million and 20 people
  • Surprisingly, Google prefers to acquire companies that are “pre-revenue”
  • Big companies are now the biggest competitors to Venture Capital funds
  • How angel investors are different from VCs
  • Companies are less successful when angels and VCs co-invest
  • An easy test to determine whether a company needs Venture Capital
  • How many companies a year actually need Venture Capital?
  • Eventhough Venture Capital has collapsed, there’s still too much VC money
  • The good news is that entrepreneurs have ample capital available