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1

Less Venture Capital Out There

Posted by Susan Hall Oct 14, 2008 12:30:20 PM

It's a tough time to be a startup. U.S. venture capitalists raised about $476 million less in the third quarter than in the same period a year ago, according to Thomson Reuters and the National Venture Capital Association. The San Francisco Chronicle quotes Emily Mendell, vice president of the venture capital group, saying:

If you've had trouble returning money to your investors, it's going to be much harder [now.]

One of the nation's top venture capital firms, Sequoia Capital, called together its portfolio companies last week and told them to prepare for hard times. Its 56-slide presentation is still making the rounds in the blogosphere. Its final message: "Get real or go home."

 

Meanwhile, Silicon Valley VC firm Benchmark Capital told clients and associates in a letter that it doesn't expect the effect on the tech industry to be as severe as 2001, which it calls the "crash on the beach," but concluded:

...It might take a long, long time before we see glory days again.

Add a comment Leave a comment on this blog post.
Oct 14, 2008 7:07 PM Guest Jim O  says:

Cycles are cycles.  Everyone needs to calm down a bit and focus on core value proposition and business potential.  Lay off the hype, fund good business ideas that have real market value, and we won't suffer another 2001.  If the VC's (which I used to be) pull back now, they are missing terrific value in the PE/VC market.  Valuations will never be lower, and the idea bucket is full due to a slow down in early stage deals over the past three years.  Don't be foolish, but there are amazing early stage investment opportunities with valuations less than $4M.  Be smart...be happy~!

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