That was the overriding message of Flatiron Partners co-founder Fred Wilson, who addressed about 800 Silicon Alley venture capitalists and company executives in search of funding here at the Wednesday opening keynote of the Silicon Alley Venture Capital Summit.
"There's a disconnect between reality and the perception on Wall Street" of dot-coms and other Internet-centric businesses, Wilson claimed. "Nothing has changed, in terms of the potential for the Internet, except for the financing environment and the perception of the new economy."
Flatiron Partners is one of the first New York venture capital firms to have targeted the Internet, and especially, Internet content, as its primary investment space. Flatiron has invested in GeoCities (gcty), Kozmo.com, Inc., StarMedia (strm), and Thestreet.com, among other new media properties.
Wall Street isn't the only one to blame for a market where Yahoo! (yhoo) took a hit, even though it beat Street estimates, with $300 million in revenues for its fiscal third quarter, Wilson said. The Fortune 500 also just don't get it, he claimed.
Many think that the Fortune 500 will take up the slack, in terms of investing in B2B and other Internet businesses if dot-coms bomb, Wilson said. "That's dead wrong. These companies (Fortune 500) are cutting back their Internet initiatives as fast as they can. They don't get it."
Wilson didn't pass the buck completely, in taking responsibility for the dot-com crash.
"Last year, all the panels I sat on were about how great the Internet was. Last week, I sat on a panel with the head of F*ckedcompany.com," Wilson told the audience. "We all deserve some blame for being in this spot," ranging from entrepreneurs, to venture capitalists to day traders, Wilson continued. "We all participated in the feeding frenzy."
But he added, "I don't think we failed. We just failed to live up to expectations."
Wilson offered a silver lining to attendees hoping that the funding well hasn't gone dry for new dot-coms and e-businesses. He said he believed that "we are close to the bottom of public valuations in this market," with the current dot-com crash likely to be "a distant memory by next spring or summer."
He also told attendees to buck current wisdom and bet on Internet content companies. He was slightly less bullish on wireless opportunities, although he conceded that market is still quite hot.
Wilson cautioned that wireless is "not an open platform" and that carriers have no incentive to open it. Wireless also currently fails to provide "the kind of user experience that the Internet does," he said.
Wilson assured conference goers that Flatiron is still in the market and is still doing deals. Flatiron's main criterion, these days, for investing in companies include experienced management teams and proof -- in the form of a successful brick-and-mortar twin, like the 7-11 chain is, in the case of Kozmo -- that the concept behind the company is sound. He added that Flatiron is completing is research and evaluation of new investments in about 45 days, slightly longer than it took the firm last year.
The Rising Tides Studios-sponsored Silicon Alley Venture Capital Summit runs Wednesday and Thursday in New York City.