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Fred Wilson has not invested since 2011.


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Jay Yarow notes:

At the end of last year, Fred Wilson, the leading voice of New York venture capital firm Union Square Venture, wrote that he hadn't led a single investment since the summer of 2011.

He's wasn't happy about it, but he said, "I have been working on a new investment and I hope it will close in early 2013."

We've been wondering if that investment ever closed.

Today, over email, he told us, "Nope. Lost that one."

We emailed back to see if he had more to add, but it looks like he's on vacation. Our initial email got an auto response saying he's "mostly off the grid" right now.

We're not sure what it means that Wilson will be closing in on almost two years with out finding an investment he could lead.

The simplest explanation is that he can't find companies at valuations he's comfortable with. He also said last year that he was going to be trying to figure out the next phase of investment.

The simplest explanation is that there are no A round startups he's excited about.

Good time for a vacation.

Here's a link to the Inc. story that Fred alludes to in his post:

http://www.inc.com/erik-sherman/why-didnt-fred-wilson-vcs-invest-startups-2012.html

This is very surprising. how could it possibly be the case that there isn't a single company he finds worth investing in?

I wonder to what extent this is really a reflection of the markets or a reflection of Fred's own desire to do something different every 6-8 years. 

Saying that "startups are overvalued right now" always seem made-up to me since startup valuations are always aggressively hypothetical, and there are a number of worthy startups that I know of that aren't attracting venture dough (*cough*) even though their terms are middle-of-the-road.

Venture investor behavior has always been lemming-like. That explains a great deal of what VCs do. I'm guessing that Fred wants to be the lead lemming and he's taking a year to find the next cliff to run toward.

Perhaps he believes that Web 2.0 was winner take all and nothing can unseat Facebook, YouTube, Twitter, Tumblr, Reddit, Instagram, and Pinterest.

Or as I call them, The Magnificent Seven of Time Sucking.

Also, you're right that there are many Startups who cannot raise money at any price. Valuation isn't the limiting factor. Investors are still reluctant to commit to many Startups because fear of downside trumps greed for upside in the current investing climate. 

He's on the "lecture" circuit now.  I'll seem him at UCI on Monday. :-)

www.ics.uci.edu/techspeakers

"Startups are overvalued" right now means that there are many that have significant investments in them, great looking business models, and maybe even some decent revenue, but they all looks plateau'd or similar and there's no breakout, change the mold things that investors feel they need to take a risk on right now. 

IN the meant time, radical innovation continues....

One person's vacation is another person's lecture circuit.

I've heard he's a great speaker.

The VC system is designed to fatten a company up for the public market like some sort of cow.  I think the truly interesting startups are eschewing VC money (and VC control).  

Yes and no.

Almost every tech company that achieves scale raises venture capital eventually.

Google, Facebook, Twitter, Microsoft, Intel, Cisco, Salesforce, LinkedIn, etc etc.

But you're right that a startup doesn't need to take venture capital to be interesting.

And venture capital can be quite helpful to some startups in ways other than prepping to go public.

I'm not saying that not taking VC money makes you interesting, but that being interesting means you're in a much better power position v. the VCs.  And that VCs are generally in the business of fattening up companies to cash out, which may not align with the company's goals.

Those are both good points.

Venture capitalists do not invest without being able to make a lot of money in 3-7 years.

And it is FAR better for a startup to be interesting than to be venture-backed.

cheers to that!

Present company included, OF COURSE. :)

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