Comments on: Cash panic sweeping VC industry: The capital calls problem

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By: Software as Services mobile edition

Software as Services mobile edition — Thu, 13 Nov 2008 11:30:53 +0000

[...] startups discovering their VC backers can’t deliver promised funds because their limited partners default on [...]

By: The VC model is broken - Start-Up News | Internet Startups

The VC model is broken - Start-Up News | Internet Startups — Thu, 13 Nov 2008 00:07:07 +0000

[...] and some are actually having trouble making good on their existing commitments (not meeting capital calls). Why on earth would DFJ think it could raise a fresh big fund in this [...]

By: The VC model is broken » VentureBeat

The VC model is broken » VentureBeat — Wed, 12 Nov 2008 23:50:05 +0000

[...] and some are actually having trouble making good on their existing commitments (not meeting capital calls). Why on earth would DFJ think it could raise a fresh big fund in this [...]

By: Joel – Retired in Mexico

Joel – Retired in Mexico — Mon, 10 Nov 2008 17:27:53 +0000

Hummm…. Lets see who has a lot of cash these days?

1. China.
Check.

2. The Middle East.
Check.

3. The Drug Cartels.
The Drug Cartels? Yea, you betcha.

If fact, while scanning this post I saw Columbia mentioned and somehow I missed the word ‘University’ and thought ‘they are in the market and public’. Well, I guess not quite.

If ‘The Drug Cartels’ aren’t in these capital markets yet, mark my words they will be in the future.

I live in Mexico, about 45 minutes from Guadalajara. About 4 years ago, a fabulous shopping mall was built, rumored to be funded with drug money. This shopping center could easily rival Valley Fair or Stanford Shopping Center with only a 1/10 of the customer traffic.

Now, there are two additional major shopping center projects under way that dwarf what I mentioned above.

So, mark my words, ‘The Hemp Hedge Fund’ or ‘Columbia Coca Capital Partners’ is not far off.

Retired in Ajijic, Mexico,
Joel Smith
www.CasaPreciosaAjijic.com

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Mon, 10 Nov 2008 05:33:42 +0000

[...] Related Link: Cash panic sweeping VC industry [...]

By: diogenes

diogenes — Sat, 08 Nov 2008 20:55:53 +0000

The VC industry hasn't delivered adequate returns for years and could use a radical reduction in size. Green tech is going to be another dotcom bust with Doerr as its cheerleader once again.

By: — Random Valley Impressions & What To Do With It

— Random Valley Impressions & What To Do With It — Sat, 08 Nov 2008 19:05:19 +0000

[...] to invest at all in the last few weeks. Related to that, as Matt reported yesterday VCs are having a hard time getting the money for investments they want to do. When you drank two beers with someone it seems it is appropriate to say something like [...]

By: neekolas

neekolas — Sat, 08 Nov 2008 04:25:48 +0000

This is silly. The penalties for defaulting on capital calls are extremely punitive. I heard this question asked of a VC at DFJ, in Seattle. He really didn't seem worried. If you are halfway through your commitment to a fund, as an LP, and can't make your next call: your equity is distributed to the other LPs. You get nothing. That means it is always better to sell your existing position, even at an incredibly steep discount. This gives the LPs more money than defaulting, and doesn't change the VC firms liquidity position. Who wouldn't do that?

What we should be worried about are the forecast for next years fund raising, which look alarmingly low.

By: CashWad

CashWad — Sat, 08 Nov 2008 01:47:45 +0000

If you paid the $189 to be at the event, you helped them make their capital calls. You don't need to go to an event and pay to hear “dont spend money.” Oops–too late.

By: Rip Taylor

Rip Taylor — Sat, 08 Nov 2008 00:51:39 +0000

I hear the Sonsini kid over at NEA is pole dancing at the Manhole to cover expenses. He wants people to appreciate him as his own man, and not the silverspoon Nancyboy son of the old man at WS.

By: Rip Taylor

Rip Taylor — Sat, 08 Nov 2008 00:48:45 +0000

Wonder if McAdoo over at Sequoia Capital will have to sell his neato ski sweater to pay the rent over there.

McAdoo: perhaps Arrington will hire you to wash his car–suckup.

By: Ken Ross

Ken Ross — Sat, 08 Nov 2008 00:47:17 +0000

I asked this exact question at your October 29 conference, and the VC participants (Doerr, Shriram, NEA, etc.), who are probably not impacted by these events, were reticent to answer. Afterwards, numerous entrepreneurs came up to me to not only tell me it was a great question, but to express their fears about this impacting them them. The biggest thing that "keeps CEOs up at night" is running out of cash (see the survey at: blog.expertceo.com), and the fact that they can't count on their investors to support them simply exacerbates this situation.