so, any of you think this will work?

[acroyear]

I, Cringely . The Pulpit . End Game | PBS:

My last prediction for 2009 has to do with venture capital. While investments in technology will continue, the really smart VCs will realize there is a much better and more certain way to make a ton of money in the short term: start a bank. Look for the rebirth of community banks, in this case backed by VCs. Work with me on this one. There is no credit available because the big banks won't lend. But it takes only about $20 million to start a very fine little bank that WILL loan money because the cash can be acquired from the Fed for almost nothing and lent at high rates to technology companies that can pay it back. By creating banks the technology industry will become self-funding. And when the big banks finally stop being frozen with fear and want to take back the lending business, they'll have to buy all those little banks for at least a 10X multiple. It's not like starting Cisco or Dell, but a 10-bagger business model that can be replicated over and over again while actually helping the nation can't fail.

I realize that he's right about starting a bank effectively being "free money" (given the Reserve's current non-rate), but the attitude of the VCs has always been "fund 20 things - the 1 success will pay for the other 19 failures a thousand times over and you can sometimes sell what's left of those 19 anyways".  A bank is more reliable in making money, but it takes longer (and all the attempts to make it faster to make money in banking is what keeps causing these market collapses, from S&Ls to the current mortgage-caused fiasco - there's a reason I like Credit Unions: they don't want to make huge profits for somebody, they simply want to survive).  I'm not so sure a VC would want to wait for 20 little successes to keep successful vs having that one big hit that he could retire on.