Make no mistake, venture capital has been falling consistently, despite all the positive spin the media hype machine used last year — tumbling and spinning numbers, comparing apples to oranges. You read about this last year on the Diligent Venture blog and again briefly here. And here’s where we are now:
U.S. venture capital investment has fallen for three straight quarters and is now at the lowest level since the third quarter of 2010 Read more …
Worse still, there hasn’t been any significant, positive change to the fundamentals to indicate that the situation will get significantly better any time soon. The JOBS Act was pitched to the public as some amazing, silver-bullet legislation that would reinvigorate investment. After passing it, all we’ve seen is consistent decline in venture capital.
Part of the blame lies with the Securities Exchange Commission (SEC), which can’t find the time or resources to publish the rules that are required to implement the JOBS Act. In fact, the SEC has already missed its deadlines for producing such rules. SEC Misses Two Key JOBS Act Deadlines.
But this is not just a U.S. phenomenon, so we can’t simply blame the SEC or the United States economy. Check out the parallel bad news on the other side of the world:
For only the second time since 2008, more than half of Israeli venture-capital funds — some 51% — made no investment in the quarter. Israeli Venture Capital Funding Slips
Are VC funds eyeballing the global slowdown, deflation in commodities, dragging sales reports, and deciding to wait and see?
"Thus, now we are facing a “nuclear winter” (!) where thousands of companies will go out of business."
— Crappy Startups Can’t Raise More Money
"Suddenly everyone believes that the answer is in accelerators, and we have no [long-term data] to support it,"
— Lesa Mitchell, vice president of advancing innovation at the Ewing Marion Kauffman Foundation, an entrepreneurship advocacy organization in Kansas City, Mo.
(Source: The Wall Street Journal)
"Berlin’s innovative frenzy is a significant shift for Germans, who tend to be risk-averse. “Obviously after the Second World War, [Germans] didn’t have a great risk appetite—they wanted to focus on rebuilding and being safe,” he says. “I think just now a generation is surfacing that isn’t bothered by the post-World War II mind-set and is instead focused on changing the world."
— BERLIN CRACKS THE STARTUP CODE
"There was much hand-wringing that Pinterest didn’t come from SXSW or even from Silicon Valley or any other technophile coastal town. The idea that the next new tech phenomenon came from middle America and spread out to the coasts left many wondering whether the pervasiveness of social technology means that the SXSW tech entrepreneurs and marketers are no longer the driver of innovation and SXSW as the place where new technologies launch is no longer the case. Pinterest, meanwhile, used SXSW to further its momentum, announcing an iPad app and plans for expanded profiles and the ability to pin video."
"Decades ago, we used to be worried about companies taking on too much debt,” said Ryan Jacob, manager of the $45 million Jacob Internet Fund, which includes Google shares. “Now, we’re worried about companies taking on too much cash."
That seems to be a possibility, if Gilad Elbaz achieves his goals. And there’s no reason to think that this brilliant mathematician couldn’t do it. He’s made himself (and Google) a fortune by asking questions that others might find ridiculous. One of his most recent questions:
“What if you could spot any error, as soon as you wrote it? Factual is definitely a new thing that will change business, and a valuable new tool for computing.”
I’m going to keep my eye on Elbaz and his company, Factual. But I’m certain that like Elbaz himself, Factual will have a very meaningful impact on all of us, even if we aren’t aware of the the causal agent that made it possible.
Read the full article here at the New York Times.
"Future historians,” said Mr. Otto, who has kept the receipt for the first meal he bought the woman who is now his wife — a hot dog at a Sheetz convenience store. “They’re going to have to be more into the computer forensics things if they want to find out what people spent money on, and how they lived."
Call me Bouge, but I hope I never have to say: “The first meal I bought the woman that is now my wife, was a hot dog at Sheetz convenience store.”
Shopper Receipts Join Paperless Age By STEPHANIE CLIFFORD August 7, 2011
[Regarding the retail trend of emailing digital receipts for goods & services.]