A recent post by Gizmodo in their "Eureka, A Celebration of Invention" series recently came under fire for failing to acknowledge the full facts of their subject company, Intellectual Ventures. Critics claim that the majority of the article serves as an extension of CEO Nathan Myhrvold’s favorite talking points, while mentioning only briefly (and among cryptic and inconsistent text) that the company has failed to take a single invention to market in its 10 year history. Furthermore, according to the University of Texas Management Company listing of its venture and private equity funds, private investments and internal rates of return (IRR), one of IV’s funds, the Invention Development FUND I, has a negative 73% IRR. Additionally, IV’s Invention Investment Fund II, has a negative 10 percent return, meaning Intellectual Ventures is one of the worst performers, delivering a negative 36.66% IRR for UT.
So is Intellectual Ventures a scam or not? We’ll leave it up to readers to decide for themselves. To balance the Gizmodo post linked above, here are a couple other resources dealing with Intellectual Ventures and the possibility of a scam – one from techdirt and the other from TechCrunch. At least one thing is for certain – the debate over the legitimacy of Intellectual Ventures does not seem like it will die down anytime soon.
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