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2011 Marked Another Strong Year For Venture Capital, But Will It Continue?

Publication Date: 
February 21, 2012
Source: 
San Jose Mercury News
Author: 
Peter Delevett

Fellow at the Rock Center for Corporate Governance Vivek Wadhwa is quoted in the following article by Peter Delevett that ran in the San Jose Mercury News and discussed the relationship between startups and venture capitalist firms.

For the venture capital industry, 2011 was a year of superlatives -- the highest level of investment in Internet companies since the dot-com bust and the highest level in cleantech ever. But it also was a year that ended on a worrisome downward swing.

Venture capitalists pumped $28.4 billion into nearly 3,700 deals, according to new numbers from the National Venture Capital Association and PricewaterhouseCoopers. Both numbers were an uptick over 2010, which itself had marked something of a turnaround for the industry after two years of declines.

...

"We won't have fewer startups just because VCs are not investing," said Vivek Wadhwa, a veteran entrepreneur and tech commentator at Stanford Law School who has argued that venture capitalists are becoming less relevant. Partly that's because the cost of starting Internet companies has plunged.

"The Facebook IPO will be great for Silicon Valley because it will create hundreds of millionaires who can fund thousands of startups," he added.