There aren’t a lot of positive stories about the rippling fall-out from the sub-prime lending disaster. But it is a fact of capitalist life that macro capital flows define the ebb and flow of large trends in markets.
Multi-year over-investment in popular sectors driven by good old irrational exuberance inevitably leads to collapses in those sectors– notable examples of this include the junk bond mania of the late ’80′s, the Savings and Loan scandal of the late 80′s, the tech bubble of the late ’90′s, the LBO boom of the past several years, and now the residential real estate meltdown which, combined with the bulge of $200 billion+ in unspoken-for LBO debt, has led to the still-in-process ‘Panic of ’07′.
This latest combination of events has caused many investors to re-evaluate risk/reward equations yet again, with the potential for an emerging positive trend for Venture Capital and for technology investing.
My partner, Keith Benjamin, has recently written about the notion that risk capital may find the VC sector to hold renewed appeal on his blog www.sfventure.com, and as a guest columnist on the popular technology blog VentureBeat.
Levensohn Venture Partners also had a big day in The New York Times today. Keith is featured in the article “Sub-Prime Fallout Could Help Venture Capitalists”, and our portfolio company, BigFix, is featured in another article “Campaigning, Not for Your Vote but for Your Dollar”.
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