The State of Venture Capital

The TechMedia club hosted the second Venture Capital Coffee Series, which was warmly received by the HBS student community. Held in Aldrich soon after Hell Week, initial fears of a low turnout were overturned when 65 RCs and ECs turned up for the event.

The speaker of the evening was Chip Hazard. Chip is a General Partner at IDG Ventures Boston whose investment interests and experience are in information technology with a focus on enterprise software. Before joining IDG Ventures in May 2002, Chip was a General Partner with Greylock, a leading national venture capital firm he joined in 1994. Prior to Greylock, he was with Company Assistance Limited, an investment and consulting firm in Warsaw Poland; and Bain and Company. Chip received a BA with honors from Stanford University and an MBA from Harvard Business School where he was a Baker Scholar and a Ford Scholar.

Chip gave a detailed presentation to students on IDG Boston, informing them that the fund was a “next-generation” firm created by experienced investors and operators with strong personal networks and domain expertise, and emphasizing how the firm is pursuing a differentiated strategy that resonates with both entrepreneurs and co-investors. Diving into the experience of the team, Chip noted that each partner has broad-based business training and in addition to 10+ years of investing experience and/or senior operating experience in start-ups.

Putting the recent economic slowdown in context to the VC industry, Chip commented on the increasing investment pace and rising valuations in certain sectors. On the upside, Chip felt that fundraising for VCs shows increasing discipline, with fewer active VC firms at the earliest stage. In Chip’s extensive experience, macroeconomics in many sectors of the economy was positive and, with IPOs on the rebound, the market is definitely recovering well. Chip emphasized that they are increasingly seeing high quality repeat entrepreneurs, which form the lifeblood of the venture capital industry.

Drawing parallels with the dot-com burst, Chip commented that in retrospect, 2001-2003 was a great time to make investments, and the same may hold true in the current depressed markets.

After the hour-long talk, students talked at length with Chip, hungry for more information, while many students expressed interest in joining the VC industry and even some future entrepreneurs were seen giving their elevator pitches.

The TechMedia club will be hosting an ongoing series with various Partners of IDG Ventures through the year. The event has generated enthusiasm from the venture capital community and various other funds have expressed keen interest in joining the series.

February 25, 2008
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