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Too much VC money creates talent shortage
By siliconindia
Bangalore: With newer venture funds coming up, it isn't surprising to see a sharp surge in funding and the number of new companies that are coming up in the Silicon Valley. Early-stage investments accounted for nearly 11 percent of new deals during the third quarter of 2010. Adding on to it the number of companies that were funded during the first six months of the year also is on rise.
It is a known fact that Silicon Valley is flushed with cash, but short on talent. Is it a good thing? Fred Wilson points out through his "Storm Clouds" that the investors are behaving badly, making $5 million to $15 million investments in web startups in these days, without proper due diligence. Even larger web companies like Facebook and Google are contributing to the madness, paying tens of millions of dollars to acquire companies to shut them down in the begining itself, just to get access to their engineers. How long they will succeed to do this is something that bothers everyone.
GigaOm's Om Malik also brings up the shocking statistic that job postings in the IT industry have increased 69 percent since October of 2009. Even the clicks on Information Technology jobs have increased 17 percent since October 2009.
Experts says that this plentiful availability of seed funding has made it easier to start a company and engendered a culture where doing your own thing is always better. Now a question arises, what does the IT companies should do to meet their shortage of engineering talents? Buy more startups earlier in their development or increase compensation for engineers to dissuade them from starting companies are some solutions as of now.
