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	<title>THE DREAM IN ACTION &#187; technology industry</title>
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	<description>By Ryan Graves</description>
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		<title>Summary: Financial Crisis effect on VCs and startups</title>
		<link>http://thedreaminaction.com/2008/09/30/summary-financial-crisis-affect-on-vcs-and-startups/</link>
		<comments>http://thedreaminaction.com/2008/09/30/summary-financial-crisis-affect-on-vcs-and-startups/#comments</comments>
		<pubDate>Tue, 30 Sep 2008 17:11:19 +0000</pubDate>
		<dc:creator>Ryan Graves</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[financial crisis]]></category>
		<category><![CDATA[Mark Cuban]]></category>
		<category><![CDATA[technology industry]]></category>
		<category><![CDATA[Venture Capital]]></category>
		<category><![CDATA[web 2.0]]></category>

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		<description><![CDATA[In 2001 the pop of the bubble in Silicon Valley brought Wall St. tumbling down. Will This pop on Wall St return the favor to Silicon Valley? The super investment savvy in NYC and beyond probably have a pretty good take on what the hell is going on with the financial crisis. What&#8217;s most interesting [...]]]></description>
			<content:encoded><![CDATA[<p><strong>In 2001 the pop of the bubble in Silicon Valley brought Wall St. tumbling down. Will This pop on Wall St return the favor to Silicon Valley?</strong> The super investment savvy in NYC and beyond probably have a pretty good take on what the hell is going on with the financial crisis. What&#8217;s most interesting to many of us is how will it affect VCs and start-ups? There are a wide range of opinions even amongst the top dogs of the industry, some think it won&#8217;t be bad, some think it will be a &#8220;startup depression&#8221;.</p>
<p>Here are my summaries and thoughts on many of the opinions I&#8217;ve followed over the past few weeks. I&#8217;ve tried something new and color coded the first few words to get a scorecard on how things are/will be fore startups &amp; VC.</p>
<p><font color="#339966">-Big banks will/have disappeared <font color="#000000">and small banks who are more willing to work on a small scale projects to find quality investments will fund VCs and startups</font></font></p>
<p><font color="#ff0000">-The IPO space is already crawling <font color="#000000">or stopped. Now as large firms lose capital the M&amp;A space will join the IPO space at a stand still.</font></font></p>
<p><font color="#339966">-Web and technology markets <font color="#000000">are probably 2 of the only bright spots in today&#8217;s global economy. This is what will bring us out of such a mess. Transparency into these markets will only exist with improvements in technology.</font></font></p>
<p><font color="#ff0000">-If the IPO drought continues, <font color="#000000">eventually LPs will realize the VC model/system is not working properly and it will be much tougher for VCs to get that money. This will make funds smaller and thus less startups will be funded.</font></font></p>
<p><font color="#339966">-In the &#8220;slumping market&#8221; VC will become introspective <font color="#000000">focusing on current portfolio</font></font><font color="#000000"> </font><font color="#000000">much more than finding new investments.</font></p>
<p><font color="#ff0000">-Funds that have already been raised <font color="#000000">by VCs can no longer be counted on. As the LPs are losing money elsewhere in the markets one of the first investments they will renig on are those that are promised but not paid, VC firms.<br />
-this will hurt small funds first<br />
</font> <font color="#000000">-this will hurt LPs relationships with VCs so the big ones will be safer</font></font></p>
<p><font color="#339966">-Startups who have VC backing <font color="#000000">already should be fine but will have to prove themselves to stay on the fun. Startups without VC funding will have to learn the (some what lost) art of bootstrapping. ALL STARTUPS will have to get lean, focus, find PROFIT$ now.</font></font></p>
<p><font color="#339966">-Strong startups will continue <font color="#000000">to get funded. The cream of the crop will rise to the top because VC are being more careful.</font> Survive and Thrive!</font></p>
<h6>*influences of thought from <a href="http://avc.com" title="Fred Wilson">@fredwilson</a>, <a href="http://informationarbitrage.com" title="Roger Ehrenberg">@infoarbitrage</a>, <a href="http://howardlindzon.com" title="Howard Lindzon">@howardlindzon</a>, <a href="http://blogmaverick.com" title="Mark Cuban">Mark Cuban</a>, <a href="http://calacanis.com" title="Jason Calacanis">@JasonCalacanis</a>, <a href="http://www.ericjohnolson.com/blog/" title="Eric Olson">@ericolson</a></h6>
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