I was struck recently by a piece in The Wall Street Journal by Pui-Wing Tam, The $1 Billion Club Gets Crowded, which highlights the amusing rate at which closely held, private US companies in the social media sector are garnering $1 billion-plus valuations. With 20 companies already fetching a 10-figure price tag— 15 of them since the beginning of last year— the bubble has swelled quickly. Even during the dot-com boom of the 1990's, just 18 such start-ups were valued at $1 billion or more, as cited by Dow Jones Venture source.
Much of the “tulip mania” behavior creating the current bubble-effect is driven by copycats, uninformed late-stage investors, and, unfortunately, public market investors looking to find the next big hit among in-fashion Web companies.
I believe that the next great fortunes also will be made by those investing in new markets and out-of-favor sectors such as healthcare. I believe early stage investors could make great returns in innovations that keep us healthy longer than the next wave of overpriced me-too social media and web 2.0 stocks.
Investors like Claremont Creek see great opportunity in innovative energy, clean technology and digital healthcare companies. These are sectors poised for disruptive upside in private and public markets.
We seek out the next generation of Steve Jobs entrepreneurs and partner with them and like minded early-stage investors who risk their time, capital and reputation to bet on a better future and remain ahead of the curve.