Recent Trends in the Venture Capital Community
Alan L. Olsen, CPA MBA(tax)
Greenstein Rogoff Olsen & Co. LLP
Recently, I attended a Venture Capital Conference in which one of the speakers predicted
we would see technology change in the next 15 years that would rival advancements
similar to the past 100 years. That is a bold prediction, but as new technologies
continue to emerge we are seeing some of the so called “Star Trek” and “Star Wars”
technologies are now becoming reality.
I suggest that if you are interested in capitalizing on these changes, just look
to the trends in the Venture Capital community. Current trends in the Venture
Capital community outline three areas that will be the center of focus in the short
term: Cleantech, Globalization, and Web 2.0.
The high energy costs are creating interest for alternative sources of energy.
The government is currently putting in place several initiatives encouraging moving
the American consumer away from our dependency on oil. The subject of cleantech
is permeating the VC world. Cleantech offers broad applications in energy, agriculture,
water, transportation and manufacturing, and promises many advantages, such as more
efficient uses of raw materials, less waste, better performance, and potential to
drive up the bottom line. Many also embrace cleantech for its social good beyond
The prospects for technology advances in this areas are improving as more resources
and human capital is entering the field. We expect more companies to show
revenue generation in this area creating futher interest.
Recently, several cleantech funds have appeared or funds with cleantech as a focus.
Even though cleantech does not have an established track record like IT or life
sciences, we expect to see increased interest and continued deal flow in this area
over the next five years. Early investors into this market should expect ample
The big challenge in the U.S. labor market begins in the year 2008 when the first
of the baby boomers will reach age 62. Over the following 15 years, we will
see a mass exodus from the U.S. workforce. All industries will be affected.
One poll predicts that 200,000 engineers will be left to replace jobs vacated by
2 million engineers retiring from the US workforce. The current attention
is placed on healthcare, however, the retirement of the workforce will also impact
logistics. Companies like Federal express may place a higher value on the
employees who actually get the goods delivered to the office, versus the pilots
that fly the plane. Part of the answer to the workforce is to bring better
technologies through globalization to the business community.
The way we see the web today will also change. Web 2.0, sometimes called the
“New Internet,” is an umbrella concept that suggests a Web-centric source for all
data. We are seeing more companies preparing for disaster recovery solutions as
dependence on technology increases. With “thin client computing”, users access
data from any computer via the Web browser, be it news, weather, reference information
or even application software, whereas the computer itself has nothing stored on
it. Web 2.0 has contributed to the rapid growth in blogging, tagging, browsers,
streaming media, and other creative services for the mass internet user (search,
movie reviews, event listings, etc.). We expect the internet use to continue
We really do live is exciting times and will participate in the creation of some
remarkable technological advancements. Following the trends of the Venture
Capital community can help us predict where the changes are apt to occur first.