So, the middle of 2010 … Hmmm…..
I remember first hearing this term “capital overhang” – it was back in 2001 when I was running around like crazy trying to sell my company at the time or raise a round of venture backing. We all saw the writing on the wall. Our clients were drying up, out markets were disappearing. Big Web Giants were starting to fall everywhere like some well developed domino scheme. One CFO of a well-funded company that we had been talking to about acquisition (ours not theirs) told me not to worry. That all these funds had over collected and they needed to invest (mind you that two days later their board rejected our offer to be bought-out citing a lack of their own capital in a market downturn). Just stick it out we were told– hunker down and things will be good again in 18 months and we had one or two paying clients left so we should be good.
Well yesterday I heard it again – Josk Kopelman – gave a really great presentation and in there was the the market should be good again some where in the middle of 2010. He had a really nice slide on stats of this venture overhang phenomena. (I will link to it when the slides are available online – for now just google it).
The reality is that the Venture or Capital tipping point didn’t come into fruition until late 2004/ early 2005 (I am no expert a deal flow so that’s just my take). Again the majority of the funds raised had been in 2000, but it two 3-4 years for that pressure to build in the system again.
So to this 2010, I have to give a big hmmmm….. Again I think josh’s speech was very inspirational and I am definitely going to stay in this startup game. I think the recovery is a ways off as even this tech cruch is yet to really hit (we just turned down a job for NYC dev corp because they are building a Employment Portal for the tech sector because they expect so many layoffs).
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