Index's Ben Holmes on the future of venture

• Lots of technology focused venture funds did badly post 2000. However, other asset classes haven't faired well recently. 
• Perhaps venture treated slightly unfairly when compared with other assest classes pre-financial meltdown.
• The venture businesses is by comparison a simple business without financial chicanery of other asset classes like hedge funds. This makes it more appealing now.
• Over the last few years many VC have become more risk averse and moved away from true venture and towards growth capital. Index Ventures have a dedicated fund focused on growth equity opportunities. 
• The weak IPO and M&A market have limited the exit potential for entrepreneurs so growth capital provides those companies with a longer runways while they wait for exit routes to improve. 
• Some venture firms have moved closer to growth capital so that they might show improved exits in shorter time frames thereby boosting their track records. In other words, later stage deals are seen as an easy way to chalk up wins. Additionally, growth capital it tends to be easier to deploy larger amounts
• However, it can be tough to get founders into growth capital. If they're cash-flow positive they may be reluctant to take investors money on terms venture firms would find acceptable. Finding good targets for growth capital is harder than it looks.
• BH can't remember a time at the beginning of the year with so many different industries and sectors on the cusp of disruption. 
• He defines disruption as a market dislocation of some sort or companies driving disruption. He sees potential in entertainment, retail, financial services and mobile. This can be combined with all the technological change still going on.
• Venture capital can and will have some great success over the next decade and will hopefully make up some of the ground lost to other asset classes and funds.

Comments

[Coach outlet]

Thank you very much for your very thoughtful and considered comment. I approach the journey in very much the same way as you've described yours.