---
title: "Venture Capital, Withering \u0026 Dying"
description: "Comparing VC cycles: 2001 vs 2023 shows striking parallels in venture capital slowdowns, IPO freezes \u0026 portfolio writedowns. Key lessons from past downturns."
categories: ["trends","fundraising"]
keywords: ["venture capital","VC cycles","IPO market","M\u0026A activity","portfolio writedowns","Tomasz Tunguz","fundraising trends","venture-backed companies","investment slowdown","Theory Ventures"]
ai_summary: "Explores parallels between 2001 and 2023 in venture capital cycles, highlighting investment slowdowns and market dynamics."
date: 2023-02-10
lastmod: 2026-07-23
canonical_url: https://www.tomtunguz.com/vc-withering-and-dying/
author: "Tomasz Tunguz"
---

Amy Cortese published ["Venture Capital, Withering & Dying"](https://www.nytimes.com/2001/10/21/business/venture-capital-withering-and-dying.html) in the New York Times on Oct 21, 2001. I came across it during a Google search & reading through the article. It's a powerful reminder of history's rhymes.

> With some market indexes off 50 percent or more and with uncertainty growing after the terrorist attacks on Sept. 11, investors have become much more discriminating.

> So far this year, 29 venture-backed companies have tried initial offerings, compared with 252 in 2000. There are also fewer mergers and acquisitions.

> Venture capital funds lost 18.2 percent, on average, for the 12 months ended June 30, according to Venture Economics, while Internet-specific funds were down 27.7 percent. 

> Most vulnerable are funds that were raised and invested at the height of the bubble, in 1999 and 2000, when 70 percent of all high-technology venture capital for the last two decades was invested.

> ''There was so much activity and so much excess in the last two years it will take several years for the system to work through the excesses''

All of these sentiments & observations apply directly to the current state of venture as they did 21 years ago.

In Venture capital investment pace has slowed. The IPO & M&A markets remain quiet. Venture capitalists have written down portfolios. 

This is a natural part of the cycle. Despite the headlines - then & now - about how things may be ending or dying - it's just a matter of time before the cycle begins anew.