economic meltdown – no VC? WRONG

So its official (ok I think it has been for a while) – the world is no longer the same is a phrase used again and again. Some of our friends in the valley (name begins with S and have a lot of cash) have also sent the SOS out to “invest in consolidation…hold your cash”…

I have met a lot of budding entrepreneurs in the last few days and all seem to be growing white hair thinking there is no more cash; infact in 80% of the interactoins I have had with press (more on this in next post) in the last 2 weeks the first or last question is always – how does the current economic climate effect your funding situation… and I think this is a worry a lot of startups are sharing so let me give my two cents worth after having spoken to some of the guys being accused of “holding cash”. Note:

  • Most of the funds the world’s VCs are actually sitting on under utilised funds – infact I know of some that are less than 25% pledged of total assets created in particular funds
  • Big pockets are still there – so there is no dirth of cash
  • However…the rules are now harder so if you think you have a new cheese making machine that you are looking to raise $10m for then the time is sadly no longer the right one but if you have a bonafide business that has real potential then there is plenty of cash
  • Note well… that valuations are a very “bearish” and most people will be hard pushed to give you top valuations from 2 years ago.
  • Present well… VCs will be a lot less forgiving – they need an excuse not to give you cash right now – not because they dont want to but lehman changed the world in september; the subprime crisis shocked the world over and like they say “things are not the same”

if any of you are still worried – pop me a message and i’ll try to calm  you down!

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1 thought on “economic meltdown – no VC? WRONG

  1. Bailout is only temporary solutions to cover what lost by financial or other industrial sectors. Final decision of moving economy is by the final customers who already have lost to high living cost. Improving citizens buying power would yield the result. Many factors are involved for the present banking and industrial crisis among them major reason is defaulting final customer. Socio-capitalism functioning would be a solution to present economic virus around world. First step at present situation is to move economy. 1.Income Tax freedom (with condition to buy) for limited time to general public to improve buying power. 2.Minimized interest or interest free to industries. So together can move economy (Buy and sell). Improve rural economy buy generating rural employment. As Excessive poverty all over the world is major hurdle for smooth movement

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