- November 13, 2008
- Posted by: admin
- Category: Blog
A few days back I was going through an article that summarized a round table event held by venture capitalists for silicon valley entrepreneurs and start-ups.
The VC’s emphasized on the following points:
The big problem with the financial crisis is how long it will last, said John Doerr of Kleiner Perkins Caufield & Byers.
“There’s been a really big change in the world and I don’t quite understand it,” said Mr Doerr, who is something of a rock star in the VC world having invested in companies such as Google, Amazon and Netscape.
The forum also compared events in 2008 with the dotcom crash of 2000-2001.At that time angel investor Ron Conway had 224 companies in his portfolio. Of those, 70% or 164 went out of business. The successes included Google, PayPal and Ask Jeeves.
“There’s been a really big change in the world and I don’t quite understand it,” said Mr Doerr, the VC world having invested in Google, Amazon and Netscape.
Everyone stopped investing in 2000. The average burn rate on all our companies was about $500,000 – $750,000 a month.Today that burn rate has dropped to around $250,000 a month. So some believe Silicon Valley will be able to ride things out.
Not all the entrepreneurs at the conference had faith in the VC community’s claim it would still be doing deals. “The VC’s are lying when they say they’re open for business,” said Jason Calacanis, founder of the Mahalo .
In contrast to the caution Mr Levchin advocated shooting for the moon. “Go big or go home,”
As few urged start ups to do all they can to survive the next 18-24 months of tough times, some warned entrepreneurs to remember what drove them to start their own business in the first place.
My question is that we all know silicon valley is not the epicenter of the crisis but will it be pulled in to the whirlpool and if yes how can we save it?