To cheer themselves up in these dark times, Silicon Valley’s venture capitalists have taken to drawing comparisons with tech’s pre-bubble days. If investment activity has returned to levels seen in the mid-1990s, the argument goes, this at least represents a healthy baseline: it is the “new normal” from which things start to pick up again.
So they should get a kick out of the latest figures from the National Venture Capital Association. Based on the $3.7bn put to work in the second quarter (up a little from the first quarter, but down by more than 50 per cent from a year ago), the total invested this year is projected to reach 1996-1997 levels. Of course, back then the VC industry provided a living for far fewer people. The shake-out has barely started.
