The dot-com era seems like ancient history to most venture investors, but its legacy lingers.
Last week ON24 Inc., a software company founded in 1998, raised $25 million, from Goldman Sachs, no less, a reminder that not every company launched back then was a flameout.
For several years after the bubble burst, venture-industry critics routinely pointed out how many of the some 7,000 companies that VCs initially financed from 1998 through 2001 were still hanging around in venture portfolios. But after a while interest faded. Venture funds are supposed to have a natural life of a decade or so, and the assumption was that most of the remaining portfolio companies had been written off or fed to secondary investors.
Nonetheless, new financings for blasts from the past such as ON24 aren’t uncommon in the venture business. During the 15 months ending last March, 100 companies founded in 1999 or before raised venture financing, according to Dow Jones VentureSource.
The sheer size of the crop of companies that venture capitalists backed means there remains a goodly group still kicking.
Take 2000, a record year for venture investment. A total of 2,895 companies received their first venture capital that year and 15% of them remain private and independent, according to VentureSource.
There are nearly 1,100 companies initially financed from 1998 through 2001 that are still private. Three of them have publicly filed for IPOs. VCs have probably bailed on some of the rest, but you can be sure there are plenty on which venture investors still have bets.
First appeared at WSJ Venture Capital