on this memorial day, it’s a fitting time to reflect on all of the recent deaths… to catch you up on some of the latest obituaries — IPOs are dead, along with facebook.  venture capital is dead.  equities are dead.  my orchid is dead. banking is dead. hell, even the web itself died nearly two years ago (according to wired).

but by death, one really means disruption… except in the case of my orchid — r.i.p.

i suppose it makes one feel smart or daring to proclaim the death of something and clearly it sells clicks (newspapers before they “died”), but in the end nothing is really dying.  it’s just getting disrupted.  perhaps so fucking disrupted that it’s not recognizable at first glance.  but the core is still there of whatever topic you choose.

saying the web is dead, would be like writing an article saying transportation is dead when horse-drawn carriages gave way to cars.

a lot of people have been claiming that venture capital is dead — wrong.  but it needs a lot of help.  as the kauffman foundation recently pointed out, only a fraction of VCs beat the market.  one of the best performing VCs, fred wilson, recently said that angel money is the most important part of the capital stack — willing to take the most risk when nothing is proven.  to form a new company now takes less capital and infrastructure than ever before.  this on top of lousy performance by traditional VCs means that venture capital is being disrupted.  

whether it’s massive funds moving to earlier stage investing (like andreessen horowitz and others have done) or kickstarter (and related legislation — the JOBS Act — recently to pass congress), how good ideas and awesome products get funded is evolving.

mark suster recently wrote a blog entitled ‘it’s morning in venture capital’.  it may be morning for some (aka the elite funds and VCs), but many funds have died and there’s a lot more to come.  huge endowments and pensions who before blindly allocated billions to alternative assets are going to rethink their strategies.  it will be telling to see just which VC firms can continue to raise new funds.

disrupted beyond all recognition, yes, but venture capital certainly won’t die — especially with poster boy investments like facebook.  but i almost forgot… isn’t facebook dying too?

how could a company that just completed the biggest IPO, a company that just collected $16 billion, a company that made $1 billion in net income last year, a company that is willing to disrupt itself, a company that is forward thinking enough to plunk down $1 billion to buy instagram dead???

tl;dr — it isn’t.  

we can debate valuation in the comments, but with a ton of cash and even more importantly massive network effects at play, facebook will not die a quick death.

so even if facebook isn’t dying, it’s terrible IPO must mean the death of IPOs… contraire.

as joe nocera argues in his piece ‘facebook’s brilliant disaster’, it’s time to rethink what defines IPO success… in other words, IPOs are getting disrupted.

investment banks and short-term investors used to rely on IPOs for a quick pop.  a sure thing. billions in riskless profit.  facebook was supposed to live up to this.  in the end, facebook price it’s IPO so well that it minimized dilution and maximized the amount of cash that it received.  arguably why a company goes public in the first place.  for the good of the company and long-term shareholders.  not the wall street folk who hold your shares for a few hours and flip.

so while investment banking — at least as it relates to IPOs — is being disrupted (arguably this day was coming since google’s ‘dutch auction’ IPO), traditional banking is probably soon to follow with a death of its own… perhaps.

after all, jp morgan just lost billions on a single trade… but let’s remember, someone else made a shit load of money for being on the other side of that trade.  capitalism at its finest.

i welcome the death of lazy industries and the disruption of those who are unwilling to disrupt themselves.  cannibalization used to be a bad thing in business books.  today, i think it’s one of the best things an organization can do.

either you disrupt yourself and determine your future, or you’ll find yourself at the disposal of a global marketplace and connected, informed populace that is moving at a faster pace than ever before.

fortune 500 companies, are you listening?

venture capital, are you listening?

congress, are you listening?

Authorjonathan hegranes