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Posts Tagged ‘Internet Boom’

Only 17 venture capital firms raise money in Q3 — fewest in 15 years

Venture capitalists are a breed in decline.

Just 17 venture capital firms raised new funds in the third quarter of 2009, the smallest number of number of firms in any quarter since the third quarter of 1994, according to new data released by Thomson Reuters and the National Venture Capital Association (NVCA).

While venture capital firms typically raise money every three or four years, and so a single quarter represents only a snapshot, the historically speaking very low number of firms raising money shows just how much of a crunch the industry is in right now.

We’ve talked about the reasons before: Venture firms saw their heyday in the late 1990s when international investors rush to give them money, lured by the impressive profits produced by the Internet boom (including the IPOs of companies from Cisco to eBay). But the surge of new VC entrants meant more competition, which lowered the overall profits, and we’re seeing the fallout now.

Only $1.6 billion was raised by the 17 firms in the third quarter, which is the lowest level of dollars committed since the first quarter of 2003 when $938 million was raised.

However, this may represent the bottom. “Anecdotally we are hearing that fundraising activity is accelerating as more firms that were waiting for economic recovery are beginning to formally seek commitments,” said Mark Heesen, president of the NVCA. “The reality, however, is that many limited partners are still determining their long term strategies in wake of the past year’s financial crisis and that slows the process down considerably. We expect commitment levels to remain modest for the remainder of 2009 with gradual increases beginning in 2010.”

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Fanbase, a web directory of athletes and their teams

A new directory of sports teams and athletes called Fanbase has launched today, aiming to mobilize fans around pages of any team, from football to golf at any level, from professional to college and high school.

It is co-founded by Nirav Tolia, the entrepreneur who led the fast-growing product review site Epinions, during the last Internet boom — a company that experienced a wild ride of boom, bust, and then partial redemption — all amid substantial controversy, including lawsuits.

But Tolia and his team have been working on Fanbase for 18 months, and it has won $5 million from Silicon Valley venture capital firm Benchmark.

It is wiki-like site, letting sports fans review and update web pages about their favorite teams and players — letting them upload photos, videos and text entries.

The site contains information on 21,000 teams and more than 1.73 million athletes (1.5 million college athletes, plus all professional athletes from major league baseball through basketball, football, and other sports such as Lacrosse — from their founding days). The number of pages will increase over coming months, in part as fans add to them, said Tolia in an interview Sunday.

Fanbase wants to make money by selling advertising, and paraphernalia such as T-shirts.

We’ve covered Tolia’s history at Epinions, including the ugly split with his founders after the last Internet bubble burst, but also his perseverance to go on to sell the company — under a different name, Shopping.com — to eBay for a profit to investors. He was accused of lying on his resume, for which he has apologized, saying it was a mistake of youth and that he has learned his lesson. Benchmark, for one, has forgiven him. Gurley, an investor from Benchmark Capital who backed Epinions,  and who is now backing Fanbase, has steadfastly defended him.

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