[lionhearted]

"Short-term returns are so low because of there were fewer ways to exit the investments. With the public markets in turmoil, venture investors have simply been unable to take their portfolio companies public, and acquisitions last year were down 28 percent from 2007.

Poor returns have led some investors to question whether venture capital is still a profitable model."

Emphasis mine. Looks like instead of getting acquired, VC-funded companies will have to just do it the old fashioned way and make some profit. The good news is that cashflow and profits are awesome, and owning a portfolio of companies generating positive returns for investors and growing is not a bad thing. Positive profits combined with growth typically sells well, though it does mess with the time horizon.

I reckon it'll mean less investors looking into IPO/acquisition for a huge score on a small percent of their companies, and more investors looking for solid, rapidly profitable and clearly useful companies.