No exit for venture capitalists

It's no secret that the venture capital industry has been suffering through a bitter season of 'No Exit' signs flashing in bright neon over every deal. TheDeal.com puts some perspective on the reality: VC-backed companies generated $4.6 billion in deals (IPOs and acquisitions) in the third quarter, down 66 percent from a year earlier (Dow Jones VentureSource). This is shaping up to be among the worst years ever--which is hardly surprising. The industry is pretty much resigned to hunkering down and focusing on growing their portfolio companies. Exits really aren't on the horizon. What this does to returns is anyone's guess. Not that the only firm that managed an IPO, Rackspace, did well on its debut. In fact, it tanked. In a sense, this is really a short-term problem. Longer-term, you to wonder what the business model will be. Things are not well in VC land.

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