Comment Articles

VC's and the tech crash of 2000

Charles Cooper AnchorDesk

Published: 18 Oct 2000 13:47 BST

How about the VCs?

The blunt truth is that a lot of dopey Internet ideas got funded in the past couple of years by venture capitalists, who, in another era, would have been drawn and quartered for the part they played in this debacle.

In their stampede to the trough, they financed some real dogs that should never have received the time of day. But the overriding objective was to do the deal and set the groundwork for the "liquidity event" (known in day-to-day English as the IPO). Quaint notions of building a great company with great technology took a back seat to the overarching objective of getting rich while the getting was good.

And so it was that capital freely flowed into companies whose lives were obviously destined to be nasty, brutish, and short. The outrage is that they were prematurely pushed into going public long before they were properly "bedded down," to borrow the particular argot of the profession.

Many poor suckers have since wound up losing their shirts. How should one properly explain this train wreck in the making? I can only summon up two explanations: overbearing greed or rank stupidity.

Enough blame to go around
And the worst may not be over. With the debris piling up, "there's still a lot of irrationality," says Stephen Pelletier, the CEO of Offroad Capital.