So Sevin Rosen says that the market for venture is so bad that they don't think they can make "venture" returns, so they're not going to raise another fund.
And now everyone's flipping out about the changes in the VC market and whether or not there's overinvestment or lack of opportunities. Chill out. Seriously.
Sure, there are a lot of problems people can point to in the venture market, but these guys aren't even playing in the same world as the VCs that get talked about in the blogosphere for their high profile internet service investments. They're a bunch of hardware guys whose very long and successful careers, like the infrastructure opportunities they chased, are winding down. They've made a lot of money, and rather than try and figure out how to build the next Google, Skype, YouTube, they're letting another generation tackle a new generation of completely different opportunities.
This is the experience and focus areas of the firm's partners:
industry veteran of over 30 years.... semiconductor, telecommunications, and nanotechnology
in the early 1980s... was CEO of two high-technology companies...semiconductor and software industries
nearly 20 years as an executive at wireless carrier and service provider companies
joining Sevin Rosen Funds in 1983...
worked with three venture-backed companies in industries such as enterprise software, flat panel display and semiconductors
focuses in areas of imaging, computing, photonics, RF communications, and Semiconductors
Capstone Turbine Corporation, a public microturbine manufacturer
taken a lead role in nurturing... a pioneer in the optical
worked with companies in
the integrated circuit and solid-state industries...spent 30 years at Texas Instruments
20 years in the semiconductor and networking industry
Chips, networks, displays... we've got these things now, thanks to guys like the partners at Sevin Rosen, but that's not where the new opportunities are. The opportunities aren't in the hardware that move the bits faster and faster... they're in the services that make the bits useful... that capture the bits, organize them... pair them with other bits for exponential value creation.
To even put companies like YouTube and Facebook in the same article as Sevin Rosin's decision is throwing the baby out with the bathwater. You might as well say that all the medical device investors should retire, too, because investing in purely web based businesses is about as different than investing in chips as you can get. That's like asking these guys to do genomics.
Venture is not venture is not venture. It matters a lot what industry you're in. It matters what stage you play in. It matters what geography you invest in. I've written before that I don't even think that what is commonly lumped together and called venture capital shouldn't even be called a single asset class, but the media, and often limited partners as well, misunderstand these kinds of investments. Sevin Rosen's departure from the scene shouldn't be taken as anything more than the nail in the coffin on hardware investment, and maybe perhaps a remark on the Texas market... not an "industry" signal.