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- Banks Join The Venture Boom...What Could Go Wrong!?
Banks Join The Venture Boom...What Could Go Wrong!?
Howard Lindzon
June 28, 2020
The Coronado lifestyle has seeped into my bones. I have slept in a few days and missed the 6 am cutoff for my daily email.
Not today!
Onwards…
There was some big news in my industry – venture capital – at the end of the week…
Driving the news: Many banks had been banned from balance sheet investing in venture capital funds due to the Volcker Rule, which was part of the Dodd-Frank financial reform package passed in 2010. That prohibition will now expire on Oct. 1, based on an announcement from a group of agencies that included the SEC and FDIC.
Looks like I may have to be nice to the banks for a bit!
If you thought there was a bubble in venture capital valuations right now…check back in three years.
I have been surprised at the resiliency of seed stage prices in the face of COVID-19. I have not seen a tick down over the last four months. While COVID has accelerated so many digital trends, I don’t think prices have accounted for the difficulties that lay ahead in hiring, marketing and sales.
With my industry about to get the floodgates open to bank balance sheet money, I doubt we see prices come down any time soon.
Next thing you know I will have to wear a tie to pitch meetings.
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