Rushing to an IPO
Venture firms played a crucial role in the bubble. In the past, they had served to winnow out aspiring entrepreneurs who had little experience and uncertain business models. The traditional venture rules for making an investment were tough.
The venture firm expected that it would take five to seven years for a start-up to be ready for an IPO, if things went well. Many investments were expected to fail, but one or two big winners would be sufficient to generate a healthy return. Thus the venture capitalist was not a patient investor so much as a realistic one.
For years, venture capitalists declared that their mission was to build rock-solid, sustainable businesses. They would seed start-ups with millions of dollars, betting ...
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