The Turnarounds are Coming
In case you needed another signal that times are tough in the entrepreneurial world VentureWire has published and article entitled Turnaround Firms Busy As Start-Up Woes Mount. The gist of the article is as follows:
The number of aging start-ups facing a shortening runway has grown in recent months, these firms say, and some venture capitalists are losing patience with longstanding portfolio companies that have no exit in sight. That's especially true for venture firms with large funds dating back to the tech bubble years of 1999 and 2000 that need to relieve congested portfolios before reaching the traditional 10-year funding cycle.
As I have noted in the past, the number of series A financings has dropped in 2008 compared to 2007 but the number of Series B and later rounds is holding pretty much steady. I believe this is due to continue to finance existing portfolio companies, but many of these financings are likely to be at disappointing valuations or to be inside rounds. This article suggests the obvious -- that the commitment to portfolio companies is not infinite and, in a world without exists, will eventually come to an end.
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