E-Commerce Times Talkback
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The venture capitalists who
invested during the dot-com fever lost a whole
lot of real money. From the
staggering losses at still-operational Priceline and Webvan,
to the complete wipeouts at eToys and Pets.com.
Question is who were VC's biggest losers -- the companies and individuals who
poured dollars into e-commerce businesses,
only to find no riches at the end of the rainbow?
What about Safeguard Scientifics? I and others lost a bundle on this stock after the dot.com bubble burst!
This current nightmare of the disaster in technology in part was caused by bizs not even having a biz plan nor a web site before getting funding. It has raised the bar that to get funded you need help from a higher authority.
Also a number of firms are seeking to leave the VC business.
DO not have a good answer, but unless we get back to that go go time of the late 1990s we are going to have a very hard time dealing with the current
economic fallout of the Sept 11, 2001 incident and
of course the current Anthrax scare. Just look
on the NewsFactor web site for the huge numbers of
people in technology who have been laid off or for that article in Silicon Valley concerning the
people who are living in the homeless shelters.
Some 40% of the people living in one shelter
were techie people. That is a disaster, even
before Sept 11, 2001.
The Western Society has some choices to make
and it is clear that by not making those choices
others are making them for us. As someone once
stated, "The Future can either be thrusted upon us
or we can make our own Future."
Let us hope that at this moment in history the VCs
arise out from their wounds and with the support
of a higher authority ride out to make a better
future for us all!
Thank you for reading this.
Asking who lost money in dot-coms and answering "everybody" isn't that useful.
In reality, those who invested in dot-coms early (as in 1995-96, NOT in the seed
rounds of a dot-com funded in 1999) made a killing while the late-comers have
largely (and deservedly) lost everything. Dot-coms getting their intial venture
funding in 1995, 1996, 1997,1998, and 1999 earned aggregate returns on invested
capital of around 135%, 65%, -40%, -50%, and -95%, respectively, as of the end of
last year. The pattern is pretty clear. Lesson? You can't just copy Yahoo and
Amazon and get rich. Too bad that 80% of all dot-coms funded were doing
the Biggest Losers article doesn't just say everyone lost. It lists the companies that invested in late stage dot-coms and which companies they lost money on after the closures. It also says that VCs who invested early lost less and those in older VC funds did not feel the burn last year.