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What A Double-Dip Recession Would Mean For Venture Capital

Published on August 31, 2010
by Mark Suster

One year ago I worried that consumers were overstretched with debt, and unemployment would continue to rise, which in turn would drive the stock market south and cut the rate of venture capital investment even further.

When I wrote this the Dow Jones Industrial Average had already come roaring back from 6,600 to 9,865 so it was certainly against conventional wisdom. It eventually closed at 11,204 in April before sliding back to 10,000 as I sit here and type. My fears haven’t abated, so I’d like to offer my current thinking on the economy and what it portends for the VC industry and fund-raising for entrepreneurs. I have a vested interest in being wrong about tough times ahead, but as the old saying goes, “hope for best, plan for the worst.”

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