多维教程通达unit04课文原文

1、Unit 4 Venture CapitalistsA Really Big Adventure1.The stories of Americas technology start-up successes are legendary: Compaq, Cisco Systems, Apple Computer, Oracle, Sun Microsystems - all were created in the past 20 years from nothing. Ciscos market capitalization equals GMs; Intel and Microsoft, t

2、wo other venture-backed start-ups are among the top five American firms by stock market valuation. 2.These firms survived because they were run by entrepreneurs with sound ideas and limitless energy. But they thrived - growing by 40% a year or more - in part because they were financed and helped alo

3、ng by venture capitalists, who took a chance on their potential long before any financial market or bank would touch them. Todays Ii best known venture capitalist, John Doerr, calculates that between 1981 and 1990 the value of the new personal-computer industry grew 11 from virtually nothing to $100

4、 billion, the largest legal accumulation of wealth in history. More than 70/0 of these firms were venturebacked; nearly a third were backed by Mr. Doerrs own firm. 3.As a result, the growth of the venture capitalists has been every bit as remarkable as that of the high-tech firms they have backed. L

5、ast year a network-equipment company called Xylan went public, valuing the share owned by its venture backer, Brentwood Associates, at 11 nearly $ 400m. The firm had put in just $ 4m two years earlier. Mr. Doerrs company, Kleiner, Perkins, Caufield and Byers, saw a similar investment in Netscape, an

6、 Internet software firm, grow to $ 250m in even less time. 4.If you had invested $1 in an average American venture-capital fund last year, it would now be worth $1.51; if you had invested in one of the best performing funds, your stake would be worth at least $2. Not surprisingly, money has been flo

7、oding into the industry from pension funds and others eager to share some of this Midas touch. 5.Tim Draper is a third-generation venture capitalist - his grandfather was one of the first West Coast venture capitalists and his father started Sutter Hill Ventures, one of its largest firms. But when h

8、e started his own firm, Draper Fisher Associates, in 1984, it took him six years to raise $ 60m. Times have changed: I went into a meeting the other day for 45 minutes and raised $ 20m, he marvels. More money in means more money out: the total of venture-capital investments reached a record $10 bill

9、ion last year, more than 35% higher than 1995s $ 7.4 billion (which was itself 50% up on 1994). Since 1992 they have grown nearly three-fold. 6.Indeed, it sometimes seems as if the main limit upon the venture capitalists growth is self-restraint. Mindful of the boom in biotechnology in the mid 1980s

10、 that left many venture firms with losses in 1990 (when biotech went bust), the best venture firms are now turning away half the money they are being offered. Secret weapons 7.Yet, despite their success and their role in creating high-tech wealth, these venture capitalists remain, for the most part,

11、 little known outside a relatively closed world. A core of about 300 are behind most of the biggest firms of the personal-computer and Internet revolutions. Many can be found on Sand Hill Road, near Stanford University in the heart of Silicon Valley, but you have to look hard. There are no towering

12、edifices of marble, just a few low wooden buildings that could be part of a summer camp. Even the nearest thing the business has to a star Mr. Doerr, who managed to rank above George Lucas and nearly half of the other entertainment and information industry heavyweights in Vanity Fairs annual listing

13、s of the New Establishment - can generally be found padding around nerdy trade fairs in sneakers. 8.Who, then, are these modern Midases? And how do they operate? 9.They are Americans, mostly. Venture capital, as defined as investments in start-ups and young companies, exists nowhere else in a simila

14、r size. Nearly half of Europes $ 9 billion in venture financing in 1995 went to management buyouts, an altogether stodgier business. In Japan, venture capital barely exists. Asian venture capital is often recorded as being nearly as big as Americas but it mostly takes the form of corporate investmen

15、t by giant conglomerates and family-run businesses. When it comes to starting companies and helping young ones grow, Americas venture capitalists have more than half the worlds market; a quarter of that last year was in Silicon Valley alone. 10.They are also mostly specialists in cutting-edge techno

16、logies. Venture capitalists do not need to be in technology businesses - and some specialize in fast-growing consumer firms, such as the Starbucks coffee company. But, for reasons explained below, venture capital and technology go hand in hand. In 1995 70% of American venture investments went to tec

17、hnology companies; two-thirds of those were in information technology, mostly computer hardware, software, and networking equipment. 11.Most important, venture capitalists are networkers. A common misconception about venture capital is that it is mainly a matter of spotting a promising start-up, giv

18、ing it a small sum of money in exchange for a big chunk of the company (10-20% is common), and then rushing to take it public so that the venture capitalist can cash out, reaping rich returns. The reality is that venture capital is mostly a matter of managing and nurturing firms. 12.Venture capitali

19、sts do that in various ways. First, by using their reputation. When they back a start-up, they confer on it a stamp of approval. Suddenly a lot of other services become available. Venture lawyers will offer to work for little or nothing, betting that when a start-up company gets big enough to genera

20、te large legal bills, it will stick with whom it knows. Accounting firms handle a venture-blessed start-up for a few thousand dollars; they charge their Fortune 500 clients millions. Venture landlords lease at a discount. Even suppliers or traditional bankers like venture-based start-ups: equity inv

21、estments make a firm more creditworthy by increasing assets without increasing debts, which brings all sorts of good things, from better terms from vendors to easier loans. 13.But for the venture capitalists, the work has just begun. In many cases, along with the equity stake comes a seat on the boa

22、rd. Even without that, the venture capitalist is likely to stay deeply involved in the management of the company for years. Mr. Doerr, for example, considers himself a glorified recruiter. The people he backs may not know much about management or finance, but he knows people who do. They will return

23、 his calls and consider his proposals; the typical new media entrepreneur with a ring in his nose is unlikely to have the same success. Where bankers fear to tread 14.This system works best in Silicon Valley, in part because of those close ties between venture capital and technology. Corner grocerie

24、s may technically be start-ups, but they do not need venture capital. Organic growth financed by reinvested profits is fine for that sort of business. Nor is there much chance that such a company will grow exponentially, as a venture capitalist would like. 15.For technology firms, however, speed is

25、everything. And this helps explain why venture capitalists and high-tech firms have grown together in America. The company with the largest market share is most likely to become the standard-setter, and the company that becomes the standard makes the lions share of the money. American firms have an

26、advantage here because America is the largest technology market; setting the American standard usually means setting the international one. But a race for such market share is no place for organic growth. Small companies may be more nimble than large ones, but when it becomes time to sell a lot of a

27、 product, they need deep pockets, too. 16.This is where venture capitalists come in. Ideally, their money should only be needed in a few chunks, each meant to knock down a specific barrier to the companys rapid growth. For start-ups, the first financing is often to let the company develop a prototyp

28、e. A second round of financing might fund marketing and sales. A third stage, usually once the firm has some sales, lets it grow more quickly than sales alone would allow. By then, the company could be ready to go public, putting financing in the hands of the markets. 17.Is this system really as goo

29、d as it seems? For the venture capitalist, it clearly works. For the high-tech business as a Whole, the growth rates are conclusive. But what about for the individual starter of the start-up, who had the idea in the first place and does most of the work? He may see each new investment as one step cl

30、oser to working for someone else, presumably something he was trying to avoid by starting a company to begin with. Nightmare stories abound in Silicon Valley. James Clark, who founded Silicon Graphics, a workstation maker, ended up with about 1 % of the company - and left in disgust. But note the se

31、quel: when he wanted to start another company, he went back to a venture capitalist, even though he was rich enough to finance the firm himself: the management and networking advantages proved too much to resist. That firm was the stock market bonanza called Netscape. 18.Entrepreneurs are sometimes

32、suspicious of venture capitalists for two other reasons. The first is that they have, for richer or poorer, married a meddlesome outsider. Once a venture firm has taken a stake, it usually sticks around either until it has made the money it wants or until the company fails. Either way, it is deeply

33、involved for five years or more. During that time it will often demand management changes and may even sack the founder for the greater good of the firm. 19.The other worry is that the entrepreneur will be forced to go public too early, so the venture capitalist can recoup his investment. Although t

34、here are cases of companies coming to market prematurely, the venture capitalist is rarely to blame. For them, going public early is not always the way to make the money; if a company is growing by 100% a year, waiting may pay greater dividends. Wed rather get $ 1 OOm five years out than $ 20m after

35、 two years, says Jim Breyer of Accel Partners. 20.Indeed, it is nearly as common for a venture capitalist to sell a startup to another firm as to float it on the market. In 1995, 95 venturebacked firms were bought in America for about $ 5 billion, says Venture One, a San Francisco consultancy; 203 v

36、enture-backed firms went public, raising $ 8.2 billion. Venturing too far 21.In a market where even average venture firms can make returns of 50% a year, it is hard to find much wrong with the system. All the same, no one expects that todays profits will last. As returns go up and success ratios go

37、up, the quality of deals will go down, says Bill Hambrecht, chairman of Hambrecht and Quist, a San Francisco investment bank. More people will put together marginal companies. Too much money will chase too few deals. 22.The main problem is not a lack of investment opportunities, but a shortage of pe

38、ople expert enough to spot them. Because venture capitalists spend so much time with the companies they invest in, they tend to finance just a few firms a year each. Here is one difference between the venture capitalists and the firms they finance: successful high-tech firms can grow as big as Micro

39、soft; venture capital houses stay small: Kleiner, Perkins has ten partners, Hummer Winblad three; most insist that all partners agree to a deal, which keeps teams small. Some of these firms are growing, but slowly. Mr. Doerr likens training a venture capitalist to crashing a jet fighter: Its probabl

40、y going to cost you $ 20m-30m. Hopefully, you can pull the ring and eject to fly again. 23.So what sort of future does that suggest for venture capital? The industry will no doubt remain at the mercy of booms and busts. Since nascent firms are more fragile than most, they are even more vulnerable to

41、 economy-wide swings. Since venture capitalists also help manage the firms they invest in, they tend to specialize in particular businesses, rather than diversify their portfolios, reducing risk. These vagaries are exacerbated by the businesss long timelags. If Americas economy starts to turn down, it will deflate the market for public offerings, saddling venture capitalists with companies they would otherwise have sold on or forcing them to sell at a discount. 24.Cycles aside,