This is precisely why Venture Capitalists hurriedly pushed their dot-com clients to the stock markets. Many of these companies would never have met earnings expectations as privately held enterprises dependent solely on their virtually nonexistent revenues. Following successful IPOs, VC's cashed out. The stage was set for disaster. Publicly traded companies are accountable to their stockholders.
Investors seek rich dividends and the promise of sustainable growth.
Fledgling dot-coms could provide neither. Investors soon began to lose confidence as more and more dot-coms fell far short of Wall Street expectations. Finally, doomsday forecasts and massive sell-offs by major investors triggered off an avalanche of panic selling almost across the board. The Internet is a powerful tool, and will continue to play a vital role in the future of business. Those companies with diversified revenue models and some form of real-world presence that leverage the potential of the Internet to expand the scope of their business are most likely to succeed.