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“Investepreneurs” – The new VC model in town

Posted by Arun Uday on June 6, 2007

For some time now, I had intended to write about the tectonic shifts that the VC industry is currently undergoing. These shifts are the consequence of the changes in the base foundation on which the VC superstructure itself stands on, which is – the technology industry itself. Industry pundits, management gurus, entrepreneurs and VCs alike have been writing and debating on whats now come to be known as the “broken VC model”. The discussions particularly reached a frenzy on the blogosphere when one of the revered VC firms – Sevin Rosen, which is credited with funding the likes of Compaq and Lotus amongst others stopped midway through its fund raising exercise and returned the monies to investors citing “fundamental structural problems” in the Venture industry.
The crux of the issue here is what can be termed as the “Commoditization of the technology industry”. This commoditization has been happening at two levels:
a) At the level of infrastructural building blocks of the tech industry viz. h/w, s/w & bandwidth, and
b) Commoditization of skills, referring to a glut of qualified personnel, who understand the technology industry well enough to be able to take on the role of a VC.
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