12
May
2008
|
06:44 PM
America/Los_Angeles

The Joke Of An $800m "StartUp" VC Fund

Sramana Mitra rightly takes to task Lightspeed Venture's new $800m fund supposedly focused on early stage investments in IT and cleantech.

With that much money you'd have to make a couple of hundred early stage investments which is clearly not possible. The VCs wouldn't have enough time to find, make, and nurture such investments.

Sramana Mitra:


There is only one reason for raising these humongous funds: Raw greed for larger and larger Management Fees.


It's not the first time Sramana Mitra has taken on VC firms in boasts that they finance early stage startups.


Here’s an excerpt from one of NEA’s press releases: “Practicing classic venture capital for over 25 years, NEA focuses on early stage investments, playing an active role in assisting management to build companies of lasting value. With $6 billion under management, NEA’s experienced management team has invested in over 500 companies, of which more than 150 have gone public and more than 200 have been acquired."


NEA is a great firm, indeed one of the classical institutions of the industry. Precisely why they should be slightly embarrassed to utter “early stage” and “$6 Billion under management” in the same breath!


I agree. It's the angel investors who take the risks and invest and nurture Silicon Valley startups. It is angel investor networks such as TiE and Silicom Ventures that do the real heavy lifting around here.

BTW TiE's excellent annual conference is coming up May 16 -17 in Santa Clara. Don't miss it!