Venture capitalists seem to be edging back into the game, and that's no mean feat after the battering they took during the past four years.
Venture capitalists seem to be edging back into the game, and that's no mean feat after the battering they took during the past four years. Back in December, I had admonished them for failing to pick themselves up off the turf when the industry needed them the most ("Hark, no heralds," Dec. 15, 2003, page 54).
Silicon Strategies, the semiconductor and chip-equipment news site in the EE Times Network, reports that so far in 2004, 59 startups have raised $834 million from more than 80 venture capital firms and other investors. The big harbinger, though, is Google's multibillion-dollar public offering, announced late last month. To many, it's a sign that there's light at the end of the tunnel for long-suffering investors looking to cash out.
Venture Capital Journal, meanwhile, reports that 13 VC-backed companies went public in the first quarter, raising more than $2.7 billion-not including Google. That's the highest quarterly total in four years.
In January, I had imagined what Cadence CEO Ray Bingham might have pondered at his holiday hearthside before his company announced Penny Herscher's replacement by Ping Chao as head of a crucial unit ("In with the new," Jan. 12, page 48). Now the gossip mongers are guessing that Ray himself is in for some office shuffling, although no one has been able to confirm it. The rap on Ray is he isn't a technologist, and you need one to run a technology company. That may have been true in the industry's youth, but as Lou Gerstner proved at IBM, today there's room at the helm for more than just a hardnosed techie.
Finally, reader Singar Balasubramanian wrote to comment on my recent musings on outsourcing. In "Hello, Bangalore" (April 21, page 52), I had noted how difficult it was to get small problems fixed by low-cost labor. Balasubramanian wrote that he'd had a similar problem with his SBC DSL and that he'd had similar travails getting it fixed-but he'd been handled by a U.S.-based support team."The moral of the story is that not everything can be attributed to outsourcing," he wrote.
Point well taken. At the end of the day, the costs of hiring low-cost but inexperienced tech-support staff-whether in Bangalore or in Birmingham-almost certainly outstrip the benefits.