Silicon Valley touches down in Oxford

 

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Posted on 21 Nov 2006 at 17:47

Another issue raised was whether the online giants - such as Google or Yahoo! - were blocking the traditional funding and development routes for technology start ups. Put bluntly, the old dream of hitting IPO paydirt and retiring for life on the proceeds of a few years of very hard work are seemingly gone. Instead, the online giants are seemingly snapping up - or out-competing - any promising newcomer.

Mayfield's Allen Morgan pointed out that with the likes of Google and Yahoo! snapping up 'feature companies' for around $10 or $15 million - Flickr, the Yahoo! acquisition was cited as an example - it was not enough to sustain the ecosystem for venture capitalists to survive in the long term. In other words, the business founders would take a sizeable acquisition pay-off but the funding organisations that had incubated the company would not enjoy a Wall Street bonanza.

Google's Chris Sacca pointed out that the YouTube acquisition was valued at $1.65 billion. These are still large figures. Morgan said the point would be proven over the next year of so. He maintained that it traditionally took four to six years for a company to successfully establish itself. Given that during the dot-com collapse from 2000 to 2003 - which he dubbed 'nuclear winter' - the VC firms were trying to preserve the firms they had already invested in, relatively few companies were started. Post 2003 the picture is different, but we are still waiting - he maintained - for the more recently funded companies to come to market, circa 2007-2009. The traditional route to IPOs would return in due course, he suggested. We shall see.

Certainly, Morgan was only joking when he said he would be making a collection for the plane fare home. Silicon Valley still has a wealth of monetary resources as well as technical expertise; the Said Business School event left you in no doubt of that.

Author: Alun Williams