It's human nature to think we are original, the first to think of or deal with XYZ, that this time is different, that we are in unprecedented times. That is particularly true of the VC industry. Once in a while, I browse through archives of old articles from past periods, to remind us that history may not repeat, but it certainly rhymes. A few gems from decades past:
On competition for deals:
• "We have less time to make up our minds... It used to be that you had two or three months. Now it’s a matter of weeks or even days, because if we don't, somebody else will" - Eugene Kleiner, 1981
• "You see five of everything starting at the same time" - Marc Friend, Summit Partners, 2005
• "We are seeing deals close in three to four weeks of a first meeting, including legal reviews" - Bart Schachter, Blueprint Ventures, 2004
• "With so much money to go around, venture capitalists found themselves competing for the attention of entrepreneurs, who were able to raise more money while holding on to a bigger share of their companies" - WSJ, 1999
• "No self-respecting growth stock investor feels comfortable with a zero-percentage weighting in the hottest new growth opportunity in our economy. As a consequence, we have seen a feverish competition among investors to own shares of the eight or 10 best-positioned companies" - WSJ 1998
• "Jonathan Lee, an entrepreneur in Redwood City, Calif., who last September started a company called Corio that distributes business software over the Internet, said he was approached by no fewer than 20 venture capital firms, including the godfather of Silicon Valley venture capital, Kleiner Perkins Caufield & Byers" - NYT, 1999
On VC becoming mainstream:
• "But never has venture capital been as sexy: It now ranks near the top of the career-choice lists on most college campuses--right after dot-com entrepreneur. Peter Wendell, a partner with $500-million fund Sierra Ventures, teaches a new course at Stanford University called Entrepreneurship and Venture Capital. The course is so packed, he said, that students are practically 'hanging from the rafters'" - LA Times, 2000
• "'I get hit up at restaurants, at parties, by taxi drivers,' he said, adding that a colleague reported that he was followed into a public restroom by someone seeking funds for a new company. 'It's startling'" - WSJ, 1999
• “I feel like the only woman at the prom of an all-boys school" - LA Times, 2000
On megafunds:
• "The initial successes of the venture industry in the first half of the decade have led to an excess of 'megafunds' - venture pools with hundreds of millions of dollars to invest. The sheer size of these funds has, in many instances, transformed seed capital from a primary activity to a marginal one" - WSJ, 1988
• "Softbank also is emerging as one of the world's few investors willing to pump $100 million or more into a single Internet company. Most U.S. venture capitalists blanch at such large amounts; they seldom invest more than $20 million in a single deal... The companies with the most money are believed to have the best chance of turning their brands into household names -- and attracting the huge numbers of customers needed to be successful. Like a poker player flush with chips, Softbank may be able to win some showdowns simply by betting more money than its rivals care to chance." - NYT 1999
On solo GPs:
• "The number of millionaire entrepreneurs is growing fast, particularly in high-tech fields, and many company founders want to invest their money in the next generation of young businesses. Some become "angels," informally investing their own money in promising small concerns. But a handful of entrepreneurs like Mr. Sippl are creating new funds that pool and invest fellow entrepreneurs' money.
Mr. Sippl, who remains chief executive officer of Visigenic, says he decided to form the small venture fund after years of successfully investing his own money in start-ups. Sippl Macdonald raised $6 million for its first fund, mostly from about 20 technology executives and entrepreneurs, says Mr. Sippl, who plans to start a second fund early next year." - WSJ 1997
On hype & unrealistic growth expectations:
• "What scares most entrepreneurs into making really aggressive revenue projections -- even if they haven't a clue how to live up to them -- is that there are 100 other business plans on the venture capitalists' desk clamoring for attention. 'People think they won't get a decent company valuation -- how much the VC is willing to invest -- without aggressive projections,' says Paul Morin, director of the Wharton Small Business Development Center, a consultancy funded in part by the Wharton School of Business, University of Pennsylvania." - WSJ 1998
• "'I actually despair what is going on in the Valley,' said Judy Estrin, chief technology officer at Cisco Systems, herself an entrepreneur who was a co-founder of three companies. ''It used to be if you had good products and you took care of your clients and customers, you'd win. That's not enough anymore. Today it's more about marketing hype and rising above the noise level.'" - NYT 1999
On roll-ups:
• "Best known for financing young high-tech companies, venture-capital firms increasingly back -- and even start -- newcomers of a different type that grow by snapping up dozens of small, independent businesses in a given industry. Surprisingly, these consolidations often involve decidedly low-tech industries such as home security or temporary help.
Venture-capital investors' interest in 'roll-ups' reflects the broader trend of consolidation sweeping through corporations and small companies alike. But it also reflects the pressure venture capitalists face to keep generating fat profits" - WSJ 1997
On European VC:
• "'Best known for its cradle-to-grave welfare state, Sweden is now in the throes of an Internet boom that has hundreds of upstart companies rushing to the stock market. Investors who once put their money in real estate and industrial blue chips are today bundling their cash to buy into startups before they go public. Two years ago, there were just a dozen or so venture-capital firms in Sweden; today there are more than 100 funds and more starting every month'" - WSJ 1998
• "Investment executives are tripping over themselves to copy the spectacular results of Silicon Valley venture capitalists such as Sequoia which returned $2bn on a $2m investment in Yahoo! They are flocking to Europe where tried-and- tested US models can be developed in what is perceived to be a virgin playing field" - FN 2000
A good reminder that much of what we believe is unprecedented in our industry, has happened before, and will happen again, perhaps with a new generation of VCs who will be too young to remember ZIRP, COVID, or the LLM race, who will think the industry is experiencing it all for the first time.