As the venture well dries up here in the US... the question is, who (if anyone) is going to take up the slack? And as a related question - do entrepreneurs need this kind of funding anymore?
To tackle the second question first... contrary to what folks like 37 Signals think, the vast majority of start-ups do, in fact, need real funding. More than that, however, almost all start-ups need either a board or something analogous to a board. And these two roles are what venture has traditionally provided.
So... nature abhors a vacuum. Is US entrepreneurship going to simply collapse into the black hole of vanishing venture dollars?
I think there is a decent chance that the venture void is going to be at least partially filled by corporate dollars. The recent NVidia announcement, the continued efforts from folks like Steamboat and Intel Ventures despite the current economy, and the war chests of companies like Cisco and Google to me look like the start of something new.
More accurately, it's the return of something old.
Self-serving corporate investment was what venture capital largely replaced.
Now... admittedly, it was both effective and reasonable. The only big issue is that it has a lower track record of creating truly revolutionary change.
In this case, however, perhaps we can hope for something new - a twist on the old. Perhaps we can combine what Steamboat is doing (corporate venture) with what NVidia seems to be doing (corporate investing) with what Intel does (start-up sector seeding) to create a new newness.
My fear is that without a Xerox PARC in the mix, an over-reliance on corporate money is going to lead to stagnation.
Of course.... there are other options... Tweet