I write this note as I fly from San Francisco to Houston. I have just been in Silicon Valley for few days, an amazing place for innovation, entrepreneurship, and venture capital. Many think and say that venture capital is dead. Nothing farther from reality. Silicon Valley's energy is impressive. There, one feels a bit removed from recession, politics (Obama's inauguration) and the global crisis. I like the mentality. Not much time to think negatively. Each problem requires a solution and every minute used to think about the problem is one minute lost in seeking solutions.
Yes, investments by venture capital fell by 8% during 2008, reaching almost US$11 billion in Silicon Valley, more than one third of the US$ 28.3 billion invested in the USA. The number of transactions fell by 4%, only 4%! Many thought that venture capitalists take their money to invest elsewhere, and especially the seed capital
would suffer considerably. Well, we are not dead yet.
However, with less available capital, a uncertain market, and few exit alternatives, the seed stage is
actually the most interesting. It makes sense, although some VC Funds will continue to provide cash to support their existing investments.
On the other hand, there is an explosion of business plan competitions. We made an investigation and over US$5 million dollars will be given away, mostly associated with a College or University. We came up with a list of 60 top notch business plan competitions. Drop me a line if you want some info. I'll add it all to my upcoming book: Funding your million dollar company. Stay tunned. And I would love some stories on funding too.
Now, more than ever, we need to nurture entrepreneurship, even in large corporations.
Everyone can do something. Overlooking at Silicon Valley I feel inspired, but I know that inspiration is only HALF of success, the other half is ACTION.
The financial crisis represents many opportunities, being in crisis does not mean we are paralyzed; we are no fools and definitely, we are not dead.