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Is it just me, or does the timing sound like the tech boom/bust cycle which could be expected to affect the results of all VCs, fat or lean? "In the first two

Is it just me, or does the timing sound like the tech boom/bust cycle which could be expected to affect the results of all VCs, fat or lean? "In the first two or three years of Flatiron, it was basically just me and Jerry. We were deeply engaged in all of our investments and we had one or two employees other than ourselves. We did very well in that period. In mid 1999, we went on a binge, raised a huge fund ($350mm), moved into a massive office, hired a staff of 25, made investments we weren't engaged in, and got fat. We did poorly in that period. We shuttered Flatiron in 2001 and I took over the entire portfolio with the help of Jerry and Bob. It was basically back to the early model. We did very well in that period."

larrys 15y ago
Exactly. But even if that weren't the case business is about risk taking. They did poorly because the market tanked and/or they made bad bets. Had neither of those two things occurred the offices and the people would have been fine. (A rising tide and all of that.) What he is really saying is that there is less risk with less people since he can more carefully manage the risk when he doesn't have a hand in so many pots. And that works in that type of a business. It's certainly not what the investors of groupon want. That being said if Fred didn't spend time writing a blog he would have more time to manage more investments. I'm sure he devotes many hours per day to that blog. But he has decided he is happy with the amount of deals and activity he is doing right now and the other benefits he gets from blogging (attracting better deals and potential celebrity).