Peter Rip, General Partner at Crosslink Capital recently authored a post on his blog EarlyStageVC that has been getting a lot of attention. Peter’s post “The Coming Venture Capital Boom” presents a view that is hard to find these days. I had a mixed reaction to Peter’s comments. To a large extent I agree with him that there will be another boom in venture capital. After all, the industry does move in cycles and the boom and bust cycles are essential for survival of the ecosystem. This was best described in a quote by Kanwal Rekhi, Managing Director of Inventus Capital Partners: “A recession is like a forest fire. It frees up resources for the newer generation of companies.”

So I agree with Peter that there will be another boom coming in venture capital — it is inevitable. I would add though that before that boom happens, and before venture firms can benefit from this upcoming boom, there need to be some changes. The current environment provides enough momentum and incentive for a change in the venture capital industry. It is my opinion that there needs to be a clearer distinction between which firms are doing “early-stage” deals and which firms are doing “growth-stage” deals. The practices in venture have evolved but the nomenclature for stages of deals has not — for example, is Series A really the first round of funding for a company? Not any more.

Peter also makes the case for “great restart and late-stage opportunities.” Though that may indeed be the case, there are more companies that will go under because they cannot raise new capital and their existing backers do not want to participate. There will be some companies that may go through a restart; but a restart is really a softer way of saying re-cap. The re-cap benefits the new investors that come in and do a downround, but it is very demoralizing for the entrepreneurs and the team. Downrounds might be an opportunity for VCs, but they’re not fun.

I do agree about the separation of the wheat from the chaff in this economy and an overall improvement in the quality of entrepreneurs and startups. The Darwinian nature of the environment makes sure that only those who are truly commited and devoted to making their companies succeed will persevere. I also agree with the rest of Peter’s comments, especially his three points regarding the silver lining.

I’ve maintained that “It is never a bad time and always a good time to do a startup.” Doing a startup is hard regardless of when you start and it is only “Insane perseverance in the face of complete resistance,” (:Jack Thorne) that can make a startups succeed. There will be another boom in Venture Capital — it will just be after we get through the current environment and hopefully change for the better. In the meanwhile, there are still good companies out there and there is still money out there for those good companies.