Business Venture Capital

The View from Sand Hill Road

Over on PEHub, Connie Loizos provides an update on how the current economic slowdown/recession/depression (pick your poison!) is affecting Silicon Valley and startups – based on interviews with investors and startup entrepreneurs.

I’ve spoken to several VCs in the last few weeks and they all are repeating the “cash is king” mantra – and doing what they can to help their portfolio companies survive on what cash they have. For companies with revenues, the magic of cash flow break-even can be very fulfilling these days. For pre-revenue companies, it’s obviously very challenging.

One investor recently told me that what’s not happening are Series B deals. Seed and series A deals are happening – at a slower pace – and series C financings – where traction with customers and revenue from them has been demonstrated and it’s only a question of more capital to ramp. But, series B deals are very difficult for those who are running out of their series A cash but still lack clear business viability. The audacity of hope is out of the air – for now – only real revenue coming in qualifies.

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