In this piece, Kinsella answers the industry’s top two questions:
- What deals and valuations will happen in VC in 2015?
- Which significant opportunities will define 2015?
His predicted themes for this year are in:
- The IPO market for biotech
- “Out of control” valuations
- A misconception about deal flow
Below is a summary of Kinsella’s interview with Brian Gromley of the Wall Street Journal:
What was most surprising about 2014?
- The IPO market opened up for biotech.
- Acquisitions of tech companies steadily continued.
What will be the biggest challenge for the venture industry in 2015?
- Valuations will keep creeping up in biotech and will leap up in tech.
This is due to two significant factors:
- Valuations paid by VCs to entrepreneurial ventures have gotten completely out of control.
- Situations occur where the availability of capital determines the value of a company, rather than its intrinsic worth.
What is the biggest misconception about the venture industry, and how can VCs change that in 2015?
- “The biggest misconception is that it’s easy, and all you have to do is get money. Just because you have a lot of money doesn’t mean you’re going to get great deal flow. It’s easy to make investments, but the problem is in getting that money back. But this is a self correcting system — and there will be tears.”
You can read the entire WSJ article here.