Venture Capitalists Must Maximize Their Time and Effectiveness More Than Ever Before, According to IDC

FRAMINGHAM, MA – APRIL 4, 2001 – Because of the stagnant IPO market, IDC believes it’s more important than ever before for venture capitalists (VCs) to maximize the time they spend with each portfolio company.

 

"For venture capitalists, understanding some of their portfolio companies’ most acute operational challenges and needs is critical to their success," said Nicole Weber, senior analyst at IDC. "Now that the economy is slowing, it is imperative that venture capitalists work longer on projects and help with more value-added resources."

According to IDC’s recent survey of 300 recipients of venture capital funding, recruiting great people is one of the largest operational challenges confronting portfolio companies. Building a brand and turning an idea into a salable product also rank high on the list. "Having recruitment and partnering programs in place that can be tailored to each company will prove very useful to venture capitalists," Weber said.

IDC believes venture capitalists must also identify what resources and services recipients would like them to provide. According to the survey, 80% of the respondents that did not receive assistance with relationship development would like their VC to provide this in the future. Respondents would also like a lot more help with top-level recruitment but are not interested in getting marketing or infrastructure services from their VC.

Overall, IDC believes venture capitalists need to set expectations, enact mentoring programs, and become more specialized and technology-savvy. "It’s okay to be a visionary, but venture capitalists should stick to the areas in which they have or can quickly acquire strong domain expertise," Weber concluded.

IDC recently conducted an in-depth survey of 300 recipients of venture capital. The purpose of the survey was to glean how venture capitalists, as well as their partner firms, can best serve their portfolio companies. Results are published in IDC’s new report, How Venture Capitalists Can Better Serve and Ensure the Success of Their Portfolio Companies (IDC #B24156). To purchase this report, contact Jim Nagle at 1-800-343-4952, extension 4549, or at jnagle@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

 

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