It’s Just Cyclical –

When venture capitalists look back at the dotcom boom and bust, I imagine that more than a few will scratch their heads and say, “what were we thinking.”

From the increase in secondary market activity to the less-than-stellar fund performance results, everyone is coming to terms with their mistakes and missteps. But that isn’t necessarily a bad thing. After all, the VC market has been through downturns before. And if VCs managed to get through the other down cycles, it just makes them wiser and more prepared for the next one – at least one hopes.

This month we take a broad look at the VC market – from secondary market activity to fund performance to potential new VC hubs.

In the cover story, Senior Editor Alistair Christopher talks with some of the players in the burgeoning secondary market, including the new online exchanges, who are betting they can make the market more manageable, efficient and liquid. While the new exchanges have their fair share of naysayers, it appears their success will lie in the ability to attract solid deal flow.

Also in this issue, we take an in-depth look at fund performance, which is showing some negative effects of the Internet implosion.

Lastly, Senior Editor Carolina Braunschweig talks with some VCs and entrepreneurs in California’s Sacramento Valley and Central Valley. While both areas are working hard to bring in venture backers, it appears only one of those regions may have come up with the right mix to attract VCs.