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.
One reply on “The View from Sand Hill Road”
Scott, thanks for keeping us up to speed on the view from Sand Hill Road. Now that I’m no longer in the nexus of the venture capital world, I feel like I’m losing touch. Keep giving us the personal insights.