Open-source venture funding down 12 percent...or is it?
The 451 Group's latest venture capital report shows open source funding taking a 12-percent slide in Q3 2008.
Open Source Venture Funding - Q3 2008
(Credit: The 451 Group)The 451 Group's Matt Aslett offers several explanations, but here's one that he missed:
Perhaps the data was faulty.
The report leaves out a range of companies that are open source but don't appear to have made it into The 451 Group's calculations. Some of these investments simply haven't been announced yet (I know of several), while others (like CloudEra) have, but don't seem to have made it into the data.
It's hard to tell since the report doesn't list the deals, but it does mention that there were only two Seed or Series A-stage deals. This is simply not true, but it's not really The 451 Group's fault: it was simply relying on publicly available data.
I have no doubt that open-source funding is down, or will be, but until we have an accurate data set, it's hard to draw too many conclusions as to how deep it will be and for how long.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
I think "faulty" is a bit strong, but then I am biased. I only ever include deals that have been publicly announced to avoid any potential problems related to non-disclosure and confusion over dates. The value Cloudera deal hasn't been publicly announced yet.
If there are any deals that we have missed that were announced in Q3 I would be more than happy to update the figures. What deals were you thinking of?
Otherwise, if you are right about the number of deals not yet announced I guess we'll see a significant uptick in Q4.
Matt
The problem with taking only publicly announced deal sizes is that that leaves off the table a wide array of data. The only way around this is to dig, which is a pain, but I do think it results in a better data set.
- by mattaslett October 17, 2008 2:51 AM PDT
- That is a fair point, but another is that I have to be confident in my data. I can be confident that we have covered 100% of the publicly announced deals. If I start adding undisclosed deals to the list then naturally I can never be sure to have got everything. That, combined with the risks of breaking an NDA means I'm not going to go there. So yes the data set is limited, but within those limits it is complete.
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(3 Comments)Besides, I didn't see people complaining about incomplete data when it was showing growth for open source ;-)