Instead, start reading up By Jonathan Burton Now that investment in U.S. technology companies has come unplugged, there are a few more car lengths between the Porsches on the highways of Northern California's Silicon Valley. Most companies that do survive will get by on far less money and staff. Even worse, institutional investors are clearly reluctant to funnel new cash into venture funds. Venture investing is supposed to be cyclical, Lerner explains. Funds are raised, investments are made and managed, then sold to other companies or individual investors.
Money is returned to investors, and the process begins anew.
Failure is an integral part of this cycle, offset on occasion by a few spectacular winners. But Lerner contends that the current shakeout will be healthy for the industry, for entrepreneurs and innovation, and, not incidentally, for public market investors. Just now, that's difficult to imagine. Venture capitalists have become uncharacteristically risk-averse. Venture firms do have plenty of money.