Back To The Future

 

Item: U.S. venture-capital investment last quarter reached heights it hasn’t seen since the second quarter of 2001.

Item: Last week during separate meetings with a current client and a prospect, both brushed off well intentioned questions about their monetization strategy. For similar reasons, they both pretty quickly admitted that “it was all about the eyeballs” and the advertisers will be lining up in the near future to take advantage of the community built around these two particular Web 2.0 product/service offerings.

Item: once again it is a buyer’s market for qualified job seekers in technology marketing and PR; our own experience and anecdotal information I’ve been gleaning from friends on both coasts is you simply cannot find anyone right now. I think Yogi Berra probably has a rational explanation for this, but it is just not coming to mind right now.

Item: this week’s Red Herring rivals the greater Boston Allston-Brighton phone book in terms of its “heft factor.” Other Web 2.0 and technology-oriented publications are seeing similar off the charts spikes in print advertising.

Okay, I am just trying to see who is paying attention among the sleep deprived New Englanders (thank you Dustin Pedroia, Josh Beckett, Jon Papelbon, et al) among us and who caught that. The first three are definitely true, but the fourth is definitely not and don’t hold your breath waiting for those wondrous days of yesteryear to return.

So, what is going on here in Q4 of 2007 and what does it mean for the rest of this year and into the election year?

Well, we live in a food chain world and we all know it all starts with the dollars. Not surprisingly, the increased levels of investment activity did not come from venture capital’s traditional strongholds in health-care and IT. Instead, the largest percentage increases came from three traditional sectors – B2B, consumer and retail sector, as well as the booming energy sector.

A quick look at the numbers and they’re not quite approaching Manny and Big Papi’s post-season OBP stats, but they are impressive. In Q3, venture investments totaled more than $8 billion, the most since the second quarter of 2001, when $9.5 billion was invested, according to Ernst & Young LLP and Venture One. The $8.07 billion is also an 8 percent increase from the year-ago period, when $7.49 billion was invested.

While technology is still king, its reign is in peril. IT investments fell 5 percent to $3.8 billion from $4 billion a year earlier. Unfortunately, health-care investments didn’t pick up the slack – rising only 4 percent to $2.47 billion from $2.38 billion in the year-ago period.

Instead, the big growth came from other sectors, like business, consumer and retail — including online consumer-facing companies — which saw investments rise by nearly 70 percent to $902.3 million, up from $533.1 million. Energy-related investments also saw a big increase of 28 percent to $590 million, as VCs continued to ride the clean-tech boom.

We like to think that BluePoint’s client base represents a microcosm of the larger business world. The recent activity among our client and prospect base bears this out. We’ve recently brought on our first solar energy client, American Capital Energy and every day it seems like another “clean tech” or “renewables” company is being funded. In addition, here’s an interesting nugget about three new BluePoint clients from the technology side — ExtendMedia, PermissionTV and Zingdom Communications: all deliver a technology solution, but none are marketing or selling their products or services to IT. They target content providers, producers, aggregators and consumers. Also, we are hearing about more companies out raising capital and getting positive feedback from the VCs as they look to bring new products and services to market. We’re often helping our clients to find new talent in product development, sales and marketing and looking out for own next hire.

We’re just not using any Internet, Web 2.0 or any other technology trade publications as door stops.

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