Billion-Dollar Baby Dot-Coms? Uh-Oh, Not Again - New York Times
Billion-Dollar Baby Dot-Coms? Uh-Oh, Not Again - New York Times
JIM BREYER, a top Silicon Valley venture capitalist, knows that the $12.2 million his firm paid for a modest stake in Facebook, an online service immensely popular with the college set, is a lot of money.
So he's not surprised that some are pointing to that deal as proof that inflation is back in the venture world - a development that can't help but stir memories of the late 1990's.
"Certainly relative to many other deals, especially deals at this same stage, the price was significantly higher," said Mr. Breyer, of Accel Partners.
Venture capital, to be sure, is a sport played best by risk takers who understand that the cost of getting into a deal doesn't matter nearly as much as the price someone else - whether a larger company or investors through an initial public offering - is willing to pay at the exit. There were plenty of V.C.'s who once declared absurd the $4 million that Kleiner Perkins Caufield & Byers paid in 1994 for roughly a quarter of Netscape. That, of course, proved to be one of the more lucrative venture investments of the Internet era.
And there was no shortage of naysayers in 1999, when Kleiner Perkins and a second firm, Sequoia Capital, spent nearly $25 million combined to buy 10 percent each in Google - an ownership stake that eventually would be worth multiple billions.
JIM BREYER, a top Silicon Valley venture capitalist, knows that the $12.2 million his firm paid for a modest stake in Facebook, an online service immensely popular with the college set, is a lot of money.
So he's not surprised that some are pointing to that deal as proof that inflation is back in the venture world - a development that can't help but stir memories of the late 1990's.
"Certainly relative to many other deals, especially deals at this same stage, the price was significantly higher," said Mr. Breyer, of Accel Partners.
Venture capital, to be sure, is a sport played best by risk takers who understand that the cost of getting into a deal doesn't matter nearly as much as the price someone else - whether a larger company or investors through an initial public offering - is willing to pay at the exit. There were plenty of V.C.'s who once declared absurd the $4 million that Kleiner Perkins Caufield & Byers paid in 1994 for roughly a quarter of Netscape. That, of course, proved to be one of the more lucrative venture investments of the Internet era.
And there was no shortage of naysayers in 1999, when Kleiner Perkins and a second firm, Sequoia Capital, spent nearly $25 million combined to buy 10 percent each in Google - an ownership stake that eventually would be worth multiple billions.
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