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Jul 26, 2008

The Silicon Valley VC Disease

Ed: With too many Silicon Valley venture capitalists, they have become risk averse - Omaha influence. Rather than venture investing, they become a bridge to an IPO or sale - a small time pre-IPO proceeding the real IPO. Thus, they minimize market, technology, and trend change risks; and deal with management staffing, standardizing internal processes, and packaging a company for an IPO or sale. Entrepreneurs can save much time and anguish by avoiding these VCs. Sad. 

The Silicon Valley VC Disease

Yesterday at the Mobile Web Wars event (here’s video of that), held right before the TechCrunch party, David Hornick, partner at August Capital (he’s the host of the TechCrunch party) told the audience that he would not invest in pure iPhone apps because the iPhone had too small a market share and that anyone who wanted to get big in the mobile space should go after all phones, not just the iPhone, which, while it’s hot with early-adopter types and is seeing people waiting in lines to buy around the world, hasn’t yet made a dent in, say, Nokia’s market share of cell phones overall.

Let’s call this the Silicon Valley VC Disease. This disease has been going on for a long time. Seagate’s CEO Bill Watkins told me a few months ago that Seagate almost didn’t get started because they couldn’t get funding from VCs who didn’t see a potential market for hard drives...

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