Back in BlackThe VC industry is fattening up again--but what does this mean for your business?

Wondering what happened to that looming shakeout in the VCindustry you were hearing about a few years ago? The VC industryhas weathered the storm and is now entering a new funding cyclewith increasing momentum.

There are currently two prevailing schools of thought on thephantom shakeout. The first and more optimistic view holds thatfears were greatly exaggerated and the state of the VC industry wasnever as bad as was rumored. "I never believed the doomsdayscenarios for the VC industry," says Mark Heesen, president ofthe National Venture Capital Association. "We heard the numberof firms was going to be cut in half. Where we have seen a declineis in the number of VC professionals. Because the fund sizes aresmaller today, VC firms don't need as many partners. As aresult, many partners have gone out and started smaller, regionalfirms, so the number of firms has remained relativelyconstant."