Venture Capital Goes Super-Size to Outsize Competition

Is super-sizing your funds a way to create venture runway to steer past or through the downturn and stay competitive in the global market? Many startups – like Mahalo, Ning and LinkedIn – pride themselves on raising enough funding to survive the nuclear winter of late 2008 and basically all of 2009. Facebook decided to add runway and incent its employees through a follow-on $100 million passive investment from DST, Russia’s Digital Sky Technologies group, who also put $180 million into Zynga in December.

Last Tuesday, Intel Capital and 24 VC firms set to put $3.5 billion over two years into US startups to bump up America’s competitive edge. Intel Capital is earmarking $200 million individually.

Via the NYT: in a program called the Invest in America Alliance, Cisco, Intel, Google and Microsoft, among other big tech employers, are hiring 10,500 US college tech grads to regain international ground lost. Per Intel’s Paul Otellini:

Unfortunately, long-term investments in education, research, digital technology and human capital have been steadily declining in the U.S. So, too, has the commitment to policies that made us such an entrepreneurial powerhouse for more than a century.

As many VCs raise more to create investment mines in nascent countries such as India and China, the market seems to be correcting in trending tides: first startups who squirreled away cash, Angel capital/investment groups who are finding High Wealth Individuals (HWIs) looking for early discounts, tech companies seeing their international talent and US competitive edges decreasing, and now VCs who see value in creating big funds. Read more >>