What do you get when you extend the idea of the US secondary mortgage crisis into the venture markets? Ask the 210 dot-com era VC funds that have been struggling to raise new funds since the year 2000. The VC market is going through it's own financing crisis at the moment, and it smells suspiciously like what's happening in the housing market. Funds are liquidating portfolio companies at firesale prices, buying LP's out at steep discounts, and adding on new LP's with hugely dilutive new money. Some general partners are even selling their own stakes.
It ain't pretty. Says Kelly Deponte of Probitas Partners, who places some of these funds "Throw these firms a lifeline? I’m more of a mind to shoot the wounded."
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