Tuesday, November 20, 2007

Worst Venture-Capital Deals of All Time

I’m always amazed by the continuing popularity of venture capital as a subject of interest to entrepreneurs. I’m amazed, because so few entrepreneurs qualify for venture capital – and even fewer ever receive any. I guess hope springs eternal.

But venture capitalists often make mistakes. If you’d like to learn from some of these errors, there’s a great story at Inside CRM on “The 20 Worst Venture Capital Investments of All Time.”

For the record, here are the top five:

Amp'd Mobile (raised $360 million, ended in bankruptcy: marketed to risky consumers and took too long to collect receivables);
Procket (networking company raised $272 million, eventually sold to Cisco Systems for $89 million);
Webvan (grocery-delivery business raised $800 million, was once valued at $1.2 billion; money burn caused bankruptcy in 2001);
Caspian Networks (formerly Packetcom) raised more than $300 million before shutting down in 2006);
Pets.com (you knew it would be on here, right? ) This online retailer of pet supplies, the official mascot of the dot-com bust, went from NASDAQ listing to liquidation in nine months.

Lots more good reading, bad examples and useful lessons here.

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