This has a real impact on employees. If the company obtains a new round of venture funding, the value of their stock options is diluted, or lessened. And in an acquisition, a solution often pushed by venture capitalists, the founders will probably have to lower their expectations as well as yield their autonomy. The venture capitalists Halcyon days are over as lower returns loom Like many of the Peninsula's venture capitalists, Cliff Higgerson, Roland Van Der Meer and David P. Helfrich have amassed an enviable record over the last few years. The venture firm, however, warned its investors not to expect such halcyon days in the future.
Venture capitalists stand astride a tricky paradox.
They have been able to raise huge new funds because of their stand-out performance over the last several years. Venture Economics, a market research firm based in New Jersey, reported that early-stage investment funds have returned nearly 50 percent for the three years ended Dec. 31, 1997. For the elite firms of Sand Hill Road, the figures are even higher. The number of venture capital professionals has more than tripled, from 551 to 1,961. But that boom was based on the glowing IPO markets of 1995 and 1996, and, to a lesser extent, the more selective market of 1997.