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The late-90s dot.com glory days of start-ups may be long gone, but VC firms are still funding new businesses on both sides of the pond - to the tune of euro27bn in Europe alone. DAVID BAIN reports
For most of us, the dot.com boom seems a million years ago, but cast your mind back to that extraordinary period in the history of business. Remember all those hugely trendy firms like boo.com, clickmango and Boxman? Well, apart from the internet - and hopelessly optimistic management - all these firms had one thing in common: venture capital.
Venture capital funds were as much an integral part of the tech boom as the internet. In the first year of the new millennium, private equity investment - venture capital and late-stage investments - swelled to $142.6 billion in the US and Europe (the European figure includes buy-outs). Four years earlier it had been just $18 billion.
In 1999-2000, it was no great shakes to walk into a meeting with a venture capital firm and persuade them to sign a cheque for a couple of million dollars for a crazy business idea - as long as it involved the internet. Wasn't everyone doing it at the time? Boo.com convinced French VC Europ@Web to do so in 20 minutes (so legend has it), before burning more than £100 million in 18 months.
Yet it has not always been boom and bust for these firms and the companies they have funded. In the US, where the industry is much more mature and ingrained within corporate financing methods, VCs played a...