Venture capitalists also are proving to be skilled bargain hunters this year. December typically brings a flurry of activity between entrepreneurs and priv ate investors as both sides in the funding equation try to clear up long-standing projects before the end of the year. This year, however, the emphasis clearly is on deals as in cheap prices with VCs displaying a little extra patience before they can buy into a company as 2000 draws to a close. People are being a little more diligent in their due diligence, said Travis Winkey, a general partner with BlueStream Partners in Minneapolis. With valuations falling like they are, deals are taking longer because people are waiting to see where prices are going to stabilize.
Nobody wants to over-pay on a particular deal if they don t have to.
That reticence seems most pro nounced right now toward telecommunication and infrastructure companies, which until recently remained nearly bulletproof in their efforts to raise huge sums of expansion capital despite a collapse for most other technology plays since March. It was a very overheated market for a while, and telecoms, in particular, were white hot, said David Stassen, a partner with St. Paul Venture Capital in Eden Prairie. But clearly, all of what s been happening recently to the public companies in the telecom market was going to cause prices throughout the industry to cool off substantially. Still, venture deals here and elsewhere are getting done albeit at a much more deliberate tempo than even a few months ago. It now has stakes in seven firms, recently wrapping up a deal with Gearworks, a Bloomington logistics-management software company and expects to soon close on a package with its eighth portfolio company.