Year Ahead: Predictions for 2010

“There’ll be more tech companies going public in 2010 than there’ll be Tiger Woods’ mistresses going public. I know I’ve now set the bar really high, but I’m truly optimistic about the prospects for technology startups in the public equity market.”

Shomit Ghose


Onset Ventures

“Rightsizing of the venture industry will further accelerate in 2010, creating a tremendous opportunity for the survivors, especially those smaller focused funds which can achieve outsized returns in more modest M&A exits.”

Roland Reynolds


Industry Little Hawk

“In 2010, we predict that we’ll see over 50 IPOs, more later stage companies creating liquidity options for their shareholders in secondary transactions, and an increase in the backlog of private companies as venture firms finance another 3,000 companies in the New Year.”

Hans Swildens

Founder and Principal

Industry Ventures

“The breakout product of the year will be the new tablet computers, combining netbook convenience, e-book compatibility and next-gen touch screen interfaces. Apple, as usual, will lead the way for consumers, but others will not be far behind this time around.”

James D. Robinson IV

Managing Partner

RRE Ventures

“Facebook will top 500 million users and be recognized as a viable platform for e-commerce. Firefox will top 500 million users and be recognized as a viable platform for add-on developers to make a living.”

Lee Lorenzen

Founder and CEO Inc.

“In 2010, more venture capital will be invested in health care information companies. This sector has been ‘underinvested.’ New software-as-a-service companies will satisfy changing needs—different reimbursement methods, novel organization structures and alliances, new care delivery models, genomics based predictive medicine, etc.—and will eventually supersede legacy systems.”

Fred Dotzler

Managing Director

De Novo Ventures

“Social gaming, pioneered by such companies as Playfish, will continue to influence what happens on the Web in 2010. For all online companies, having a sophisticated social media strategy will become as important in 2010 as SEM and SEO have been in the last few years. Also, non-gaming services will increasingly seek to use game mechanics learned from the social gaming companies to drive conversion, retention and virality.”

Ben Holmes


Index Ventures

“We will see a significantly improved exit environment in 2010. There are more great private tech companies with scale—say $50 million in revenue—than ever before, and by a wide margin. There will be many premium M&A exits. The IPO market will also see an uptick, although one constraint is the reticence of many CEOs taking their companies public. They do not want the scrutiny, regulation and cost associated with being public. But overall, 2010 should be a robust exit year.”

Sandy Miller

General Partner

Institutional Venture Partners

“As an entrepreneur in the mobile augmented reality space, I predict that image recognition will become a core technology tool used by developers, ad agencies and brands for ‘linking’ all aspects of physical reality to mobile virtual reality. … Thus, the new hyperlink becomes anything and everything. No codes, no retrofitting the world, and no special mobile apps.”

Jamie Thompson



“There’s going to be a rebirth of the IPO market.”

Mike Kwatinetz

General Partner

Azure Capital Partners

“Venture capitalists will unfortunately continue to get more press than the entrepreneurs we’re backing.”

Mark Solon

Managing Partner

Highway 12 Ventures

“We believe that 2010 is going to see a reasonable recovery in the rate of new VC investment in energy and cleantech. The VC community is going to place more emphasis on later stage energy deals and on energy efficiency companies in particular.”

Dennis Costello

Managing Director

Braemar Energy Ventures

“2010 will see a meaningful pick up in venture-backed IPOs. My guess is about 40 to 50 venture-backed IPOs for the year, which would be up from about 20 in 2009. There is a rapidly growing backlog of actual and potential new registration fillings for 2010.”

Dixon Doll

Co-founder and General Partner, DCM

Former Chairman, National Venture Capital Association

“Deal volume and exits will improve moderately in 2010, yet have little positive effect on overall VC fund returns cemented by subprime selections 10 to seven years ago. Without fundamental change in the venture model, 2010 returns and deal intake will remain predominantly subprime and continue to contract and lose faith with limited partners.”

Georges van Hoegaerden

Managing Director

The Venture Company

•“M&A is back big time. Almost all the large acquirers sat on their hands during the downturn. That is done now.”

Mitchell Kertzman

Managing Director

Hummer Winblad Venture Partners

“The 2000 bubble destroyed the venture capital industry with excess capital; the collapse of the 2007 buyout bubble will ultimately save it. Investor appetite for alternative investments has declined; appetite for venture has declined even more. The result will be significantly less capital committed to venture, which in turn means significantly better returns on that capital for the survivors. The key, of course, is to be a survivor.”

Rory O’Driscoll

Managing Director

Scale Venture Partners

“There are going to be more situations where we come in for a down round or a recap. This is a great time for that because there are a lot of entrepreneurs who can’t raise money from their existing investors. This is a fantastic time to have high quality deal flow and very low valuations. But it won’t last.”

Cameron Lester

General Partner

Azure Capital Partners

“Along with ‘Cash for Clunkers’ and ‘Cash for Caulkers,’ we finally might see some tax reforms and investment programs at the federal level to support ‘Cash for Commercialization.’ We can only hope.”

Brian Darmody


Association of University Research Parks

“2010 IPO candidates will continue to be the victims of the high-volume, high-velocity trading of hedge fund and investment banking economics that demand an impossible flow of ponzi-scheme-like numbers of short-term investors. VCs and entrepreneurs can avoid that by building a base of long-term investors that will drive corporate performance-based valuations.”

Mona DeFrawi

Founder and Retired CEO


“We’re going to see a lot of small startups forming with little-to-no capital and no intent of ever getting VC. The launch costs and operating costs are continuing to plummet and the liquidity exits are getting rarer, so why bother with financing at all?”

David Weekly

Founding Director

Hacker Dojo

“Funds will continue to shrink in 2010. Meanwhile, VCs will look to boost returns and more will make seed deals, narrowing the VC/angel funding gap. The IPO and M&A markets will take off. Twitter will likely get bought in 2010. Angel activity will increase considerably. And investors will be bullish on mobile and location-based technologies.”

Joey Lo

Managing Director

Venture Hype

“More funds will add more new companies to their portfolios in 2010 vs. 2009. M&A activity will be up significantly.”

Skip Simms

Managing Director

Michigan Pre-seed Capital Fund

“Next year, I see the focus on small and medium enterprise startups, not just for seeking the next superstar. It means supporting them to reach self-sustainability.

Maurizio Rossi



“2010 will be a year of challenge and opportunity in the health care sector. The challenge will be for those companies with limited product differentiation and/or capital-intensive programs, as the health care reform agenda and economic environment will work against them. The opportunity will be for active investors, who will find interesting, growing companies with high-value products at attractive valuations, because of a less competitive financing environment.”

Lou Bock

Managing Director

Scale Venture Partners

“With the real possibility of a W-shaped recession, two investment strategies will play out best in 2010: Late stage investors will achieve strong IRRs during sporadic open IPO market windows, emulating merchant banks; and Series A classical VC investors with small fund sizes will generate the largest absolute returns.”

Rick Bolander

Managing Director

Gabriel Venture Partners

“I’ve seen an increase in interest and attendance in entrepreneurship events in Silicon Valley in the last year, particularly in the social marketing, online payments and virtual goods spaces. This uptake in interest and attendance at startup events suggests that deal flow and fund-raising are heading into a significant rebound in 2010.”

Chris McCann


Startup Digest

“Social shopping will gain tremendous traction as a consumer trend in 2010, as shoppers increasingly look to social networks to find and share discounts and bargains and band together to exert buying power. VCs will keep their eyes open for startups that offer innovative ways to facilitate social shopping.”

Amy Errett



“New models will bridge the gap of Web business and social media in a much more economically sound fashion than any of the social media business models of today. The end result will be a brave new world of social media that is based on sound economic fundamentals. Of course, this will not happen all at once in 2010, but 2010 will be the first year when this will begin to materialize at a significant scale.”

Husband and wife team of Svetlozar Kazanjiev, Founder, Aboomba

and Drue Kataoka, Artist,