Digital Media Center Looks Ahead at Financing Scene for 2012

12/7/11Follow @jpruth

Investment bankers, entrepreneurs, and venture capitalists gathered Tuesday morning at the New York offices of accounting and consulting firm Deloitte near Bowling Green to listen to a panel discuss the financing outlook for technology startups in 2012. The event was the first to be presented by the Digital Media Center, a new group formed by Cooley, CTPartners, Deloitte, Nasdaq, and Silicon Valley Bank to bring together New York startups in the digital media sector with investors and other industry players.

Moderated by Dennis Kneale, senior media and technology correspondent for Fox Business Network, Tuesday’s panel spoke with cautious optimism about the sustainability of the funding scene as the New Year approaches. Kneale stirred up the discussion with questions about the value heaped on technology companies given the hype and scrutiny faced by the likes of  Groupon, Zynga, and Facebook.

Panelist John Lambros, managing director with investment banking firm GCA Savvian, took a positive stance regarding growth equity investments in 2012, though he tempered his enthusiasm. “It’s going to be good, not great,” he said. “I think the market is going to continue to support the growth in the digital media sector.” Fellow panelist Jonathan Sherry, co-founder of CB Insights, which provides information on venture capital and angel investor-backed startups, said venture capitalists are not raising funds at the same rate prior to the most recent run-up.

Sherry also said there were some unfounded concerns about investments made at the seed stage that drive up the number of deals numbers. “People are speculating whether or not this is a bubble,” he said. “It’s not too much to be concerned about. Seed deals may comprise 5-15 percent overall deal volume in a given quarter.” He said the dollar amount of such seed deals, however, represents 1-5 percent of the market. “Even if all these deals failed it would hardly make a dent in the financing market,” Sherry said. “The bubble talk is a little bit overhyped.”

Panelist Michael Jenkins, a vice president with Goldman Sachs, also had a positive … Next Page »

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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