Innovation Doesn't Take a Vacation in an Economic Downturn

By the end of 2008, venture capital had been officially declared dead. Start-ups were laying people off so fast that even TechCrunch couldn’t manage to keep up. University Endowments and Foundations, the source of the “capital” in venture capital, were hemorrhaging so badly from their public company investments that many long-time believers in “alternative assets” declared a moratorium on venture capital. And the IPO market was a distant memory. Good times!

Welcome 2009. The public markets remain closed. Venture investors and the investors in venture investors remain “challenged.” Follow-on financings have become increasingly difficult, in some instances impossible. And, while there may well be light at the end of the tunnel, it would appear that we haven’t gotten far enough down the tunnel yet to see that light.

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