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Last week, I was thrilled to speak at the Rice University Alliance Web 2.0 Forum. I have included the slides below that I used to articulate why there has never been a better time to start a company than today.

In researching the data for the presentation, I wanted to compare the current venture capital environment to the past. The conclusions I discovered were different than I expected and I had to change my presentation to accomodate it.

Over the past 2 years, I have accumulated 30 years’ worth of US venture and exit data from a variety of sources. With this, I built a slide comparing the 15 year median values of dollars raised (entering the system) and outcome values (leaving the system). The results are surprising.

Funds raised are down 44% while exits are on par or larger in dollar terms. The exit data is encouraging particularly in light of the dearth of exits from 2007 to 2009.

The funds raised figure is more complicated. There is no question the venture industry is shrinking, which should imply better returns for investors. With the decreased costs of starting a company as a result of elastic infrastructure, massive distribution platforms and a shift away from capital intensive endeavours like semiconductors, this may be the right correction in the market for the longer term.

Redpoint had a very active year with more than 20 new investments. We believe there has never been a better time to start a company.

Tunguz Rice Keynote 2010
http://d1.scribdassets.com/ScribdViewer.swf?document_id=45276020&access_key=key-13ppm50vktb5gmp1po2z&page=1&viewMode=slideshow

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3 thoughts on “There has never been a better time to start a company

  1. Bigger bang for the “invested” buck, it seems. What was the conclusion you were expecting to see from the data. Great blog and chronology of events in various tech industries. Wonder if there is anyway to further categorize the soundbites you add daily so you could use them for data purposes as well; become your own data filter for data that is meaningful to you (and likely anyone reading this).

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