Russell mails in this interesting article at the NYT. It highlights a field of VC activity that hardly gets much attention - the buyout of startups acquired during the tech boom.

"Silicon Valley is littered with hundreds of former start-ups trapped inside larger technology companies that are no longer happy with the ventures they snapped up in the acquisitions frenzy of the 1990's."

"Now a pair of Silicon Valley-based venture capitalists have opened an unusual $250 million fund intended to buy and rehabilitate such companies, which Terry Garnett, one of the two founders, calls "the orphaned and the unloved."

"In some cases, the best candidate for running the newly freed company may turn out to be its original creator."

While I see this market as an interesting niche, the problem is often that such a startup is often drained by years of mismanagement and the best people have gone already. A buy-out might be interesting but the risk is still high (compared to say a manufacturing company) while the upside (an IPO or another trade sales) if often smaller compared to a "virgin" tech start-up.