There’s no doubt, much of the way we see the world has changed during the last six months. I have been around long enough to recognize that it is starting to look like days long gone by. (Does anyone remember the 80’s?) Today, global financial markets are in turmoil, the venture industry is at risk of being regulated , and fewer exit opportunities have created a clogged pipeline of mid-stage venture-backed companies. More than a few of these can be great companies with high growth potential, but mid-stage investing is not familiar or glamorous enough turf for many in the venture industry.
Gone are the days when early-stage principles could be applied across A, B and even C rounds with equal measure. Mid-stage companies in today’s environment have very different needs than their early-stage counterparts of old. Traditional venture techniques like prudent cash management and creating products/services that have customer “pull” before you give the “push” will make a comeback; recapitalization/buy-out techniques will provide relief or reality for fatigued investors; and close collaboration between and among venture capital firms will help get more of the estimated 6,000 mid-stage companies over the finish line.
Time will tell but it looks like the days of the “alpha dog” VC may well be over as we check our egos at the door and work together to move companies through the pipeline to fruitful exits.
