In the meantime, interest income on cash awaiting investment is paid out to fund shareholders. The bursting of the Net stock bubble has reduced entrepreneurs' expectations about VC valuation of their companies, and the nuclear winter for public offerings has sent even well-established ventures scrambling for private funding. At the same time, the terrain of Internet technology and business has become more familiar, and VCs can afford to be more careful navigating it. MeVC's good fortune was to begin investing when the Net stock slide was in full swing. Most of them are in Internet enabling services, such as Cidera, which offers satellite delivery of broadband content to local Internet distribution points, and Personic, a provider of online systems for corporate staffing management.
Emphasis is on later round financing of companies that have demonstrated potential.
Make no mistake, though. Even at 56 cents on the dollar, MeVC should be bought only to spice, not feed, a portfolio, and held as a long-term investment. The fund's charter envisions liquidation only after 2010. Take that seriously. The bubble insanity that allowed companies to go public months after founding and soar overnight to billion dollar valuations is gone.