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To: Oeconomicus who wrote (143122)	6/18/2002 7:31:56 PM
From: GST	Read Replies (1) \| Respond to of 164684

A very well-reasoned analysis -- bloated post-IPO valuations and the passive nature of post--IPO "portfolio" investment are clearly not what venture capital is all about. The fact that the companies were pushed into the market prematurely does not mean you "got in early" from a valuation standpoint. Ironically, TIVO is clear example of the risk of mistaking the IPO price as a valuation based on "getting in early". On the contrary, the IPO was the point where investors had the opportunity to buy in very late. Anybody investing in a VC fund must also be aware of the very real possibility that they risk losing 100% of their investment. As for diversifying risk -- a highly correlated basket of stocks in the same or closely related lines of business has nothing to do with "diversification".