An entrepreneur I met recently has several Sand Hill Road venture capitalists (VCs) eating out of his hands. Having launched their product on Kickstarter, they are collecting in pre-orders at the rate of upwards of $20,000 a day. With $3 million in pre-orders at hand, VCs are begging to invest – or get in on this opportunity. The pre-money valuation has risen into the “obscene” category. Without Kickstarter, this company would have been laughed out of any VC meeting with a terse comment – “we don’t do hardware!” As Marc Andreessen correctly pointed out, software is eating the world. And now software is eating venture capital! Online portals like Angellist may have just begun nibbling at toes of Sand Hill road. VCs are burying their head in the sand (or silicon, depending on the geography).Foundry Group is one of the first VCs to look at this wave as an opportunity (as opposed to a threat) and have launched FG Angels syndicating investments via AngelList. Give such online marketplaces a few more years and it will reconfigure the VC landscape completely.
Image Courtesy of Idea go / FreeDigitalPhotos.net
