But today it's harder to see what real lessons they may have picked up. In the past few months, dozens of companies have announced that they will take write-downs on their Net investments. The losses add up to hundreds of millions of dollars. Under generally accepted accounting principles, companies must take write-downs for investments that have fallen and aren't likely to recover. Firms must report how much they believe the value of the investment has declined.
Nontech companies are in a more vulnerable position than others that did venture investing.
Many Internet firms, for instance, swapped their own overvalued stocks for shares in other dot-coms. Technology vendors often traded hardware for shares. That's a sore subject for many executives. Some of those companies are still in business, and news that we wrote down our investments will only have a further deleterious effect on them. Although few executives will admit it, many VCs say that nontech companies that invested in dot-coms were really chasing big payoffs.