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I interviewed Sharon Wienbar, Managing Director Scale Venture Partners @NVCA Venturescape. Scale Venture Partners had just raised their 4th fund $300m very quickly & at their hard cap. Scale invests in companies that are in the scaling phase. Â After you’ve got product market fit & you’ve found that early sales channel thats working, you may be lucky to raise money from them to help scale the business. Their companies average about $4m in revenue in the year they invest & they average a growth rate of about 97% a year (some of them are much higher). Â She also spoke about the changes to the venture industry. Â The biggest most important thing is that innovation keeps happening regardless of economic cycle. For example, right now you’ve the twin trends of cloud & mobile changing the computing architecture completely in the same way that emergence of the web did in the mid 90s. Â That’s creating opportunity across the spectrum both consumer facing companies, enterprise applications & core computing infrastructure companies. Â There’s a massive upheaval of new companies & new technologies that customers are buying. Â That’s a ton of opportunity! Â On the other hand there is the whole financial sector, what’s happened in venture capital, how much capital is there & what’s happening in our little ecosystem. Â We’re about .2% GDP, a tiny piece of GDP even though the companies they invest in end up driving about 21% GDP. Â That current GDP that is being invested is down sharply from over 1% GDP at the peak of the bubble of the bubble of 1.0. Â So people think of that as the hey day of venture capital & in fact it was this crazy spike of returns that came from that new architecture. Â But then it pulled in so much capital, flooded the market that it ground venture capital returns for the ensuing 10 years. Â So really the industry has right sized itself now to about the same size it was as a % of US business in the 70s & 80s. Â Its about the right size now – there’s plenty of capital for companies but not so much that you fund 20 competitors for every good idea & then tank the market.