This is a story that is unfolding daily. Think back to a few years ago when internet venture capital flooded the markets. This writer was involved. Our firm created three VC funds. They were small funds in terms of the "big boys" such as Hummer Winblad and the like.

Nonetheless, the investment philosophy we chose was decidedly different than any other internet-oriented VC funds. The idea was not to shoot for investments that could be IPOs, but rather invest in small companies that might one day be significant "players" in niche online content areas.

Fast forward to late 2001. Internet values have been trashed. The stock markets are going down and down. The Internet has been hung, drawn and quartered by the financial press.

The reaction: investors who were throwing their money at VC investments now want their money back! Counter-reaction: Many VCs are forced to close or to have greatly reduced investment dollars.

So what happened at Jupitermedia. Fund I remains operational, but due to incredible obnoxious pressure by individual investors and particularly one large New York City commercial bank, we were forced to cease making VC investments or to nurture along ongoing investments that showed promise.

Fast forward to today: the above-mentioned New York City commercial bank (its private client operation) is surely beginning to realize how ignorant and costly their panic was to the very clients they were trying to protect. Why? Because several of the investments that this private client operation thought worthless are in fact going to be very valuable. By not allowing further investment in some of these operations, the Fund manager (Jupitermedia) was not able to make additional rounds of investments at favorable rates and terms and thus a great opportunity is down the drain.

For example: There is no hotter area for Internet investment than in China. Fortunately several of our investments were made in China in late 1999. Unfortunately, because of the actions described above by this particular bank, we were prevented from gaining a larger position in one of these companies at particularly favorable rates.

I have no doubt that in a few months these "very clever bankers and investors" will be right back in the middle of Internet VC.

Jupitermedia still has interests in a variety of VC investments that will probably prove to have value. This is good for stockholders, but such potential returns could have been much greater.