[RTC List] Could VC be a Casualty of the Recession?

[Josh Koenig]

Thanks for the links, John. It's a real interesting perspective from Y- 
Combinator.

I think we're going to see a lasting shift away from financialization  
and derivatives, and back towards a more old-fashioned set of values.  
For entrepreneurs, this means focusing on sustainable profitability  
rather than managing towards a "liquidity event" or other jackpot  
outcome.

More broadly, I suspect that a number of people who end up getting  
knocked out of whatever big money games they might be playing will re- 
evaluate what "value" is in terms of Quality of Life as well. It  
should be an interesting shift.

For my part, I'm still waiting for the other shoe to drop, and fully  
expect to take some hits in 2009, but to the extent that people  
provide services that are actually useful, and do so at a competitive  
price, business is out there. Lean times just tend to shake out the  
fakers.

Also, I'd point out another good Paul Graham link for these times:  
"Why to Start a Startup in a Bad Economy"

http://paulgraham.com/badeconomy.html

Cheers!
-josh


> sorry for forgetting to include the original link...
>
> http://www.paulgraham.com/divergence.html
>
> On Sat, Dec 6, 2008 at 9:44 AM, John Hauser <jhauser at pobox.com> wrote:
> I came across an interesting essay from Paul Graham about how the  
> circumstances surrounding funding a startup have changed in the past  
> 10 years.
>
>
> "VCs and founders are like two components that used to be bolted  
> together. Around 2000 the bolt was removed. Because the components  
> have so far been subjected to the same forces, they still seem to be  
> joined together, but really one is just resting on the other. A  
> sharp impact would make them fly apart. And the present recession  
> could be that impact."
>
> It's a refreshing read, especially compared to the doomsday  
> Powerpoint deck "Get Real or Go Home" from Sequoia making the rounds  
> a couple of months ago...
>
> <http://www.techcrunch.com/2008/10/10/sequoia-capitals-56-slide-powerpoint-presentation-of-doom/ 
> >
>
>
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------------------------------------------
Josh Koenig, Partner, CTO
http://www.chapterthree.com
AOL IM: chap3josh
1-888-496-3238