The CMGI Farce

At a recent gathering of venture capitalists and other pious alumni of HIT brought together by Technology Review magazine in Mountain View, Bob Metcalfe–the inventor of Ethernet, founder of 3Com, high profile tech pundit and MIT alumnus in his own right–put the state of the YC world in fast perspective. “At one time, the venture capital community was a cartel,” he said in the night’s featured presentation. “But I believe that cartel has been broken. Competition has intensified and now the VCs are slitting each other’s throats–and that can only be good for everybody.”

The comment had stopping power not only because Metcalfe spoke pointedly to his audience, but because he spoke the truth. Today more than ever, VC firms face intense competition, because–in the words of Mohr, Davidow general partner George Zachary, “Much as anyone with a keyboard can call himself a journalist, anyone with a checkbook these days calls himself a venture capitalist.” Read the rest of this entry »