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Event Writeups, Photos and Video

 Dec 11, 2008 Event Summary of “What’s Fundable in a Down Economy?” by Erica W. Brand

 

 “The companies that survive this downturn will need to think like roaches, to persist and exist after the economy improves.” – Vivek Mehra

 In a packed room at the Palo Alto Cooley Godward office, the attendees listened and participated in an open and riveting discussion of how four venture capitalists saw the economy now, and in the near future. Eric Buatois - Sofinnova Ventures, Shahin Farshchi – Lux Capital, Vivek Mehra – August Capital, and Bob Pavey, Morgenthaler Ventures served on the panel to answer pertinent questions from moderator, Bill Eichen, Sensor Platforms. Bill Eichen asked incisive, thought provoking questions: What have you funded recently, what are your plans for next year? Are the deals cheaper, are VCs getting deals? What’s hot for next year? Are you looking for young teams, or experience teams? Do your existing startups present more competition for time and money for new startups than they do in a better economy? Bill also proactively translated VC code words like “powder” for money. It was a terrific opportunity to hear from these involved front-line investors. Overall, there was recognition that the economy was extremely tough, more so than 2001, but optimism that it would improve and shared belief that it was important and necessary to keep investing. There was also support for the idea that times like these reduce the noise of questionable ventures and make it clearer to pick strong ones.

Possible hot areas were lightly acknowledged, with software defined radio added to the list of green, Saas, and cloud computing, but mostly the VCs wanted to see strong teams, good ideas, and new ideas to round out their portfolios. “By the time there’s a conference on the subject, it’s not new.” – Mehra. The VCs clarified that the desired experience level varied with the newness of the field, and a quality, well rounded, global, and diverse team was most important. The VCs expected to contribute time in addition to money to help small companies grow, and needed to pick carefully for the right choices. Overall the message was encouraging, and there was consensus that there still is room for bright, innovative, well run startups to begin or continue despite the dour economy.