What's Wrong With Venture Capital?

The exception: Google’s successful initial public offering over five years ago did not usher in a new era of good times for venture capitalists; it merely served to underscore how rare these happy events have become. Credit: Getty Images

From Technology Review:

The old mechanism for funding the commercialization of new technologies is in trouble.

In the summer of 1996, Silicon Valley venture capitalists put a few million dollars into a telecom-equipment startup called Juniper Networks. Three years later, after a few more rounds of funding and the release of its first product, Juniper enjoyed an initial public offering of shares, or IPO. At the end of its first day of trading, it was worth nearly $5 billion, and within nine months, it was worth almost 10 times that. The original venture investors, meanwhile, were able to walk away with profits of better than 10,000 percent.

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