During the bubble, companies and VC’s actively sought out strategic investors for the “C” and “D” series of financings. They relied on the “irrational exuberance” along with strategics’s limited VC experience to get them to overpay (often 2x and 3x what a comparable VC would have priced the round at). Like any system based on poor, unsustainable fundamentals, this did not end well for the strategics and most shut down their venture arms. Those that stayed involved like Motorola & Intel, remained disciplined and are more active than ever, often getting invited in the first or second round.
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