Boring summer in VC -> Exciting summer for PRI/MRI

Joel Dreyfuss on his boring summer in VC tech.

 

I can see that.  I didn't get a chance to experience it, but I can see that.

 

Things have been busy this summer for me. Socially responsible investing has gotten more interest in the past few months, and much more activity.

 

More people are interested now, because the classic argument that you are sacrificing return when making a socially responsible investment, or mission/purpose related investments is lost.

 

No one is making good returns.

 

No one has IPOs. and the M&As are less than thrilling.

 

So if your money is going back into questionable deals.  What would you like to see happen with that cash? 

 

Joel is right that cash returns are needed.  Without a timely infusion of cash into the system, the VC model dries up.  And today, 2008 is 9 years after 1999.  When a lot of funds were started, and few survive into the next cycle. 

 

If you were running a foundation today.  And you had the choice to invest in another VC fund, when conditions were this poor.  Or use the same money into a program/mission related investment, where the fundamentals of the business are aligned with the purpose of the foundation.  What would be a better use of your money?  What would your stakeholders want you to do with the cash?

 

Both are high risk/high return possibilities.  But today the risks are high on both ends.  And the returns look the same on the cashflow side.  On the other benefits, the PRI/MRI activity wins.  PRI/MRI furthers the reason the foundation exists.

 

It might have been a boring summer in tech VC.  But other areas were busy preparing for the coming season.

 

Now we have to see who else wants to join the party.