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Dotcoms should brace themselves for a fresh spate of public company collapses, a major New York venture capitalist warned today.

And it's not all the fault of the e-entrepreneurs - some of the venture capitalists are also to blame, according to Alan Patricof, chairman of Patricof & Co Ventures.

"We're going to see a lot of public failures," Patricof told eager attendees at today's Silicon Alley Venture Capital Summit in New York. "There are a lot more that are going to go - probably some of our own too."

He added that this process would "probably be cathartic" as too many dotcoms had floated which shouldn't have. "Today, we have a lot of companies with very young, immature business models," he said.

"I think the incubator programme has gone crazy. We don't need all these start-ups."

Patricof, who served as Chairman of Entrepreneurs for Clinton and Gore in the early nineties, said there was too much finance floating around from venture capitalists last year. And a lot of companies were going to fall when they started looking for the second round of funding because of unsustainable business models.

But he said that the dotcom whirlwind had changed the mindset of many venture capitalists - "A lot of companies were just trying to play the IPO game".

"The old metrics do apply - you have to make money."

Fred Wilson, managing partner at venture capitalist Flatiron Partners, added: "We all participated in the feeding frenzy."

"But I don't think we've failed, I think we've just failed to live up to unrealistic expectations."

Wilson reckons that the public market valuation for dotcoms is close to rock bottom - but represents a more realistic price - and will bounce around until Christmas before recovering "hopefully Spring, Summer next year". ®

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