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View Full Version : The next big financial scandal


02-19-2002, 01:27 PM
For those of you who follow these sorts of things NEA is one of the larger VC firms in the country.


"NEA partner Tom McConnell said his company is doing about six to seven new investments per quarter. ``That's down significantly, but I think it's a sustainable pace,'' he said.


He pointed to a new trend, though: more so-called ``cross-over'' investments. In normal times, that practice -- which refers to a VC's dipping into a new fund in order to invest into a portfolio company originally invested in by a previous funds -- is considered a no-no. Investors in venture funds prefer not to have their new money go to bail out previous funds that may have troubled companies in them.


But that taboo is changing, as venture firms seek to shore up companies for the long haul. Another Sand Hill Road firm, InterWest, is doing the same: ``We're doing a fair amount of this, more than ever before,'' said Flip Gianos, general partner at InterWest. ``People are going to look back and ask: Why did you do that? That was a risky thing to do. It's a chance we're taking.'' "