The Silicon Lining

Think long term. Long, long term. In the short term, there will be pain in Silicon Valley. Start-ups will have to survive 2009. Layoffs will be in fashion: “You didn’t do a layoff? What’s wrong with you?” Venture capitalists will be hit just as hard. Their investors–the endowments, the pension funds and others–are hurting. The entire portfolio of the California Public Employees Retirement Fund, for example, a major investor in venture funds, is down 20 percent and needs to raise capital. Cash will be scarce in 2009, no matter if you’re a pension fund, a VC or a start-up. Wall Street is broken. But Wall Street has been broken for eight years now, as far as Silicon Valley is concerned.

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