Is Value-Based Venture Investing Returning?

The Wall Street Journal and others are noticing that Internet startup valuations are coming back to Earth.  Aggregate numbers show industry rebalancing.  Health and consumer services investment sectors are down big.  Energy is up.

The press and Wall Street love a great story, which means sex and financial gore.   Silicon Valley has grown large enough to accommodate.  From billionaire moguls to VC and superangel glitterati and seductive new products to painful lawsuits, there is always a tale of intrigue.

But the players in the news are just the tip of the investment iceberg.  There are about 600 angel networks that represent 12,000 accredited investors.  That’s less than one percent of the estimated  1.6 million angels.

The real story is that value-based investing never left. As Ralph Patterson notes, “the majority of VCs and Angels haven’t strayed very far from the belief in ‘traction.'”

Funding fashions come and go in the top strata of Bay Area and other venture capitals.  But everywhere else value investing in the best deals available was and continues to be the norm.





1 Response to “Is Value-Based Venture Investing Returning?”

  1. 1 Cathryn December 29, 2012 at 11:50 pm

    Wow that
    was odd. I just wrote an very long
    comment but after I clicked submit my comment didn’t show up. Grrrr… well I’m
    not writing all that over again. Anyways, just wanted to
    say fantastic blog!

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