Cash in early
Fri, 08/21/2009 - 06:45 — jpark (not verified)
WSJ.com.
Silicon Valley Workers Seek to Cash In Early
http://online.wsj.com/article/SB125081385350848101.html
This changes things for both the investor and the company.
But hidden in the article was some more chilling news.
In 2002 the average time to exit was 3.3 years. Now it is 8.3 years. So on average in 2002 the company was started in 1999. Today the company has been started in 2001.
That is a very long time for investors and employees who thought they were signing on for 3.3 years. This also means that the pipeline of companies is getting jammed. The companies might survive or they might just go out of business waiting for another cash infusion. Either way it is not ideal.
Without returns there is no recycling of cash. The need to get money out is felt by all investors. There is no difference in need between the investors who put in cash or the investors who put in time and talent.
Silicon Valley Workers Seek to Cash In Early
http://online.wsj.com/article/SB125081385350848101.html
This changes things for both the investor and the company.
But hidden in the article was some more chilling news.
In 2002 the average time to exit was 3.3 years. Now it is 8.3 years. So on average in 2002 the company was started in 1999. Today the company has been started in 2001.
That is a very long time for investors and employees who thought they were signing on for 3.3 years. This also means that the pipeline of companies is getting jammed. The companies might survive or they might just go out of business waiting for another cash infusion. Either way it is not ideal.
Without returns there is no recycling of cash. The need to get money out is felt by all investors. There is no difference in need between the investors who put in cash or the investors who put in time and talent.
- jpark's blog
- Login or register to post comments
Copyright 2010
Jean-Luc Park
All rights reserved