Again, with the WSJ. They report this morning that VCs are starting to invest later in the business lifecycle, maybe the cocoon stage rather than the caterpillar stage. While seed- and early-stage investment has stayed about constant for the last 5 years, later-stage investment has tripled since 2000. Some of this is just investing leftover dot-com-boom cash that had been mouldering under the mattress, before the funds expire and close up shop (VC funds usually have a limited lifespan). They'd need to be able to get out sooner rather than later, and later-stage companies give them that chance.
Still, the traditional VC model has been kind of like Dave Kingman - no average, but lots of power. Maybe only one in ten, one in fifteen really pays off, but when it does, it's a 10- or 20-bagger. If this does represent a more conservative mentality, it may not bode well for those entrepreneurs. On the other hand, VC's are probably in that game because they like it. So this may be more of a cyclical phenomenon, and when new funds open up, they'll be there looking for the Main Chance again.
I'm not in VC myself, but so far, none of the more / high-profile / VC / bloggers has commented. Maybe they're out looking for the Next Big Thing.
UPDATE: Friday, I spoke with a VC friend of mine, who seemed to think is was both monetarily and psychologically psyclical. He had noticed the same thing in his own business, but also seemed to think that the change wasn't permanent - that new money would be pushed into startup and seed-stage companies, and that it would take a couple of big winners there to get the rest of the industry to follow suit.
So all isn't lost, but depending on where the business cycle is when that new money starts coming in, it may take a little while for the engine to get revved up again.