When it comes to investing, a venture capital firm may be able to raise a mega fund, but it will be the last one if the firm can’t put that money to good use with solid, worthwhile investment opportunities, or in other words, deal flow.
While most venture capitalists are in agreement that sourcing good opportunities can transform almost any VC firm from a dud to a stud, there is some disagreement on whether or not that deal flow should come from its internal network or from placement agents.
In this month’s cover story Senior Editor Alistair Christopher talks with some VCs about the pros and cons of using placement agents and their role in the VC market – a role that stretches from merely aiding VCs to being an indispensable spoke on the wheel.
Also in this month’s issue, Associate Editor Charles Fellers takes a look at some of the new realities for VC investing in the Northeast.
Lastly, the VC community has been witness to many groundbreaking events in its time. It has also seen its fair share of investments go belly-up especially in the Internet sector; however, it has probably never seen a VC firm turn away or return commitments for its latest fund. In late November, Crosspoint Venture Partners suspended plans for a $1 billion fund citing the current state of market conditions. Only time will tell if Crosspoint’s actions are a sign of things to come, or just an extremely cautious firm playing it safe. Regardless, it bodes for an interesting 2001.