Analysis says venture capitalists and VC will usher in the Golden Age in the next 10 years

Science blog TechCrunch published an analytical article in Sunday by Clearstone Venture, managing director of the venture capital company, William Quigley William Quigley.　　The article said that the next 10 years will be the venture and venture capital companies to obtain high returns of 10 years. The following is the main content of the article: poor investment in the late 90 in a report earlier this week, I talked about some of the recent positive changes in the venture capital industry. These changes are obvious and will have a lasting impact on current venture capital companies and start-ups.　　The report addresses the "Golden Age" of venture capital in the late 90, when companies such as Netscape, Yahoo, Amazon and ebay have just started. That is a very good time for startups and early investment, but one thing to point out is that for these good companies, most capital gains occur after the companies go public. In other words, the main rewards for building these companies, including the world's largest electronic retailer and the largest online auction site, are vested in public shareholders.　　This is reasonable because it is the average user who participates in most of the value creation processes of these enterprises. So why take the risk of early development as a founder, early employee, or investor, rather than buying shares after a company goes public? In general, the risk of investing in a listed company is less than that of a private company. However, in the past development cycle of the technology industry, the situation has changed greatly.　　For investors, the era of listed companies with lower venture capital is over. Amazon's market capitalisation is 440 million dollars, which is unbelievable. The company's current market capitalisation has reached $90 billion trillion. Amazon's market capitalisation did not even reach its total revenue for the next 12 months. ebay's market capitalisation was 650 million dollars, less than 3 times times the total revenue of the following 12 months. In the early 90, companies were listed at a lower market value. Cisco's market capitalisation was only $225 million trillion, just over 1 years of revenue.　　At the time, venture capitalists and start-ups thought they could get a high return, but the end result was that public investors had the most to gain. Start-ups and VCs usher in a new era for those who aspire to create a company to build a global business, we are entering a new era, and this will be an extraordinary time. I would call this era the "real golden Age" of startups and private investors.　　They can create great value before the company goes public. Google is the catalyst for this change. When Google was listed in 2004, the market value reached 40 billion dollars. At that time, many people believed that the dotcom bubble had appeared again. However, the situation changed, the bubble did not appear. The outside world is beginning to find that some companies can create value at a faster rate. Investors who think Google's share price is overvalued quickly realise that Google's share price is actually undervalued.In 2010, Google's gross profit was about $19 billion trillion, while operating profits were close to $12 billion trillion. When Google goes public, investors will be happy to buy Google shares if they can anticipate Google's performance. There were indeed some investors doing so.　　So what caused investors to have previously valued Amazon and ebay for only $ hundreds of millions of trillion, and 6-7 years after Google's valuation to 40 billion dollars? I believe that during this period, there were 3 major changes in the market. [Page] Three major reasons for the change are first and foremost the popularity of Internet services. When my partner and I started the Consumer Internet Fund, 1997, we thought the internet had become mainstream. However, at that time we judged wrong. In fact, even by 2000, only 1/3 of Americans use Internet services. At present, almost every American family has access to the Internet, many of which use broadband services. The growth of the Chinese market dwarfs the US.　　By 2000, China had only 20 million Internet users, and it was now close to 500 million. In the latest technology cycle, the rise in internet penetration has been reflected in the valuations of technology companies.　　Investors now generally believe that companies such as Facebook and Zynga can benefit from a growing global internet penetration rate. The second is the development of hedge funds. Since 2000, the number of hedge funds has risen by one-fold, and the assets they manage are close to $2 trillion trillion. Why is this factor important? Because hedge funds are usually focused on a certain class of assets, such as technology stocks. This concentration brings a strong professional, so that the development potential of technology companies more accurate estimates.　　This is much different from the 80 and 90. Microsoft was launched in 1986, 11 years after Microsoft was founded. At that time, Microsoft's market value of 640 million U.S. dollars, about 3 times times the annual revenue. When Microsoft came on the market, Windows was already the world's leading operating system. However, as a company to go public when the purchase of the main force, the public fund at that time little attention to science and technology industry. Few investors can predict the pace and scale of the subsequent growth of Microsoft, so investment bankers give Microsoft a very conservative valuation, which gives public investors nearly all the value Microsoft has created.　　However, if Facebook is listed, then public investors will not have the same luck. VMware was listed in 2006 with a market capitalisation of $12 billion. But its market value soon grew to $30 billion trillion. As a result, its early investors gained 1/3 of the final value. Google's founders, early employees and investors gained 25% of the final value.　　For Microsoft, Cisco, Amazon and ebay, its founders and early investors gained less than 1% of the final value. For current leaders in the technology industry, including Facebook, Zynga, Groupon and Twitter, the founders and early investors of these companies canGet 50% to 75% of the final value. Therefore, if you want to participate in the current or future technology cycle of the wealth creation process, then you need to become the founder of the Enterprise, early employees or investors.　　The more easily profitable stage will be before the company goes public. The third factor is the opportunities in global markets. In the 90 's, startups never considered entering the international market in the first few years of its existence. For many of these companies, it is only after the listing that they focus on the international market.　　But that situation has now changed. At present, the enterprise develops the international market development strategy as fast as the domestic market. The cost of operating a global business has fallen sharply, while revenue growth opportunities have increased. In 2000, India's economy totaled $500 billion trillion, now at $1.4 trillion trillion. Brazil's economy totaled $600 billion trillion 10 years ago, compared with $2 trillion trillion in 2010. China's economic growth is a leap-forward, with the economy growing from $1.2 trillion trillion to $5.7 trillion trillion in 10 years.　　The three largest economies have increased their contribution to global GDP by 6.8 trillion dollars since 2000. Public investors have learned about these economic data, and economic growth has enabled start-ups to benefit more quickly from global markets. Groupon is the representative. Despite only 4 years of existence, Groupon has entered 35 countries worldwide. Given the company's global strategy, it is expected that the number of employees outside the United States will reach 20,000 in the next 2 years.　　Groupon's market capitalisation is expected to reach $25 billion trillion. In the past few years, many of the traditional limited partners of venture capital funds are withdrawing, fearing poor returns. But I think it would be a mistake. In the future, companies that are involved in building new businesses and providing capital for start-ups will receive more returns than ever before.