About three years ago I attended a financial conference where a big VC stated, categorically, that the reason they were not investing in semiconductor or EDA startups was because there was a lack of informational coverage to validate research. In other words, because media coverage of the industries had significantly degraded, they couldn't afford to pull the trigger on investment.
This same VC firm has invested heavily in Web 2.0 and green technology over the past three years and you can see why. There is lots of coverage on those areas. There is pretty much nothing but coverage on those areas. The only coverage on semi and EDA is negative.
You might say that that is the media's fault because, after all, the semiconductor coverage is all about the economics of the industry, not the technology so it's naturally going to be bad. But I would like to point out that the the green Web 2.0 industries has yet to turn a profit, yet the media continues to go bonkers over the technology. What's the big difference? Which industries invest more in getting their story out?
I know, I'm a broken record. But this time I have a case study.
I've been working with a start-up in the semi arena for a few months now helping them craft their message and get a communications program going for them as soon as they get funding. I've also been introducing them to VCs to get that funding. We had a lead investor all ready to go. They got great feedback from current customers. Dataquest and IC Insights show real growth potential for this particular technology over the next 18 months and beyond ... but the rest of the players in the market haven't put out anything innovative in five years and they look like they are cutting back even further. There is no media outreach in the sector so, as a result, the only buzz is negative. Even with all the numbers lining up for success, negative buzz made the VCs back off. They still want to invest, but they don't want to take the lead.
There are many similar stories out there. Investors are lined up and ready to invest in technology outside of Web 2.0 and green, but not as a lead investors. All because of a a lack of media.
What about all the bloggers covering the semi sector? Well, here's the thing: the VCs haven't yet come over to the blogosphere, even when they invest in it. That's going to take some education still. And education requires some investment in media. Funny how that works, isn't it?