Situations like the dotcom fiasco will happen again because venture capitalists are like crack addicts who can't help themselves, warned industry doyen Bernard Daines.
Speaking at Netevents in Montreux, Daines, who is chief executive, founder and chief technology officer of World Wide Packets, launched a stinging attack on venture capitalists who he said were holding the industry in a recession because they were refusing to invest cash until they all felt confident.
"They are herd followers. This is what they are doing now, following the herd into the country club and doing nothing. They act like frogs in a big washpan: one frog can climb out, but two frogs will never climb out, as they keep pulling each other down," he claimed.
Daines said that once the VCs see money being made again, they will all be back in so as not to miss the boat. Then the market will go to the other extreme with "daft ideas" being given money.
"They should not be waiting for recovery before jumping in. At that time, it will be too late. One must participate and be part of the recovery to take advantage of it, lest one's lunch be eaten by those who were in the right place at the right time," he said.
"VCs are just like any other crack addict or alcoholic. They all say that they have learned their lessons, but when the temptation is there, it becomes evident that they have not learned their lessons," he added.
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