BIZBarcelona - Salón Emprendedor

Straight to the point. Jerry Engel asked the participants of the first round table of the day one idea about where Capital Risk is moving to.

David Berry, from Flagships Ventures, pointed out the need to focus on “where the next disruption comes from”. Garret Gruener, from Alta Partners, underlined that even if Venture Capital is getting “more ambitious”, “VC projects are taking longer to complete“. Some, more than 10 years. Randy Komisar, from Kleiner Perkins Caufield & Byers, enhanced that “Venture Capital is still about people” and he stressed that “to do great things you need to work with great entrepreneurs, who are efficient and focused“.

On the other hand, Phil Sanderson, from IDG Ventures, denied there is another tech emerging bubble, and he emphasized there is “a huge opportunity for investors and entrepreneurs in the gaming area“. “The revenues of Zynga [the company which has developped Farmville on Facebook] are very real”, he said.

Eventually, Joël Jean-Mairet, from YSIOS, and Jim Hornthal, from CMEA Capital, highlighted the opportunities in the cleantech and biotech sectors. In that sense, Hornthal underscored the need of “finding a needle in a haystack versus finding a haystack of needles.”

To close the round table, Engel asked the participants to tell the audience where to place their bets. The majority agree that cleantech and biotech are good shots, but Komisar insisted on that the most important thing is “finding what makes sense to you and follow your passions“.

It is not just the LinkedIN’s epic IPO. It is not that the business networking site saw its shares more than double as they debuted on the New York Stock Exchange on May to a bidding frenzy from investors. It is not just that. But some analysts consider it another clear sign of new technology craze, of a bubble similar to the one that burst at the turn of the millennium.

The alarm bell started to ring a few months ago. Even before the valuation of Zynga, the little company that created the game FarmVille, had soared, with new investors trying to get in at prices that value the company at between $7bn and $9bn. Since then, Twitter has been valued at $10bn and Facebook is said to be worth more than Ford. Eyebrows up. Statements of the anthropologist Sekai Fari, who was awarded a grant by Columbia University to study the startup community two years ago, have been quoted several times by media. “The idea that your idea could be the next big idea is very real. There’s a real air of excitement.” Could it all end in tears? “It always does.”, she said.

Others are more prudent. The second edition of the quarterly PwC Valuation Index series states that “it is notoriously difficult to identify when you are in a bubble without the benefit of the hindsight”. The report also enhances it is worth differentiating between established technology companies and start-ups, as there is a different set of circumstances in place today compared to 2000. John Batelle, founder of the Industry Standard, is even more categorical about it. He says to be tired of “the easy comparisons to the dotcom bubble”. “They simply aren’t accurate”, he insists while he underlines that LinkedIN is a “real business”, which turned a profit of $15.4m on revenues of $243m in 2010.

Whether social media valuations are justified and it appears to be a social bubble is a difficult question to answer right now. Many entrepreneurs still think that the best course is to ignore the predictions, keep the foot on the gas pedal and build a strong business.