Disqus - Latest Comments for Bronson

Re: To Moonlight or To Quit? – Starting up in a downturn

Bronson — Fri, 27 Feb 2009 14:46:02 -0000

My only addition is to note that you will not be able to raise (institutional) capital if you are not full time. However the majority of business plans I see I would not recommend the entrepreneur quit their day job ; ). If you can build the product without quitting (or any legal issues) go for it. Minimize your risk.

Re: betaworks

Bronson — Tue, 06 Jan 2009 13:04:07 -0000

I am surprised I have not heard more people making calls for this

Re: NY Tech Meetup

Bronson — Wed, 10 Dec 2008 20:28:28 -0000

Nate is the best choice. Many of the candidates have spoken about the need for collaboration across the tech communities. Nate is already ingrained in many of them and is one of the best connectors I have met. He is logical choice to facilitate the collaboration and build upon the great community that Scott and Don have built!

Re: What's Risky?

Bronson — Wed, 01 Oct 2008 16:13:36 -0000

The same argument could be made that now is a great time to invest in a value fund (I have several friends in the area and they are salivating). Endowments have a VERY long term horizon and I don't think they will decide to alter their allocation significantly. The roman numeral and top decile funds will still be able to raise capital but it will be more difficult across the board. I think on the east coast there is a general belief that SA is slower to react since they are somewhat more removed from the crisis. my 2cents

Re: What's Risky?

Bronson — Wed, 01 Oct 2008 15:55:11 -0000

Nate,
Great post but I would add a caveat to what you are saying. Money is still going into and will continue to go into GOOD startups…. However, I think it would be easy for an entrepreneur to read your post, and think it isn’t going to be notably more difficult to raise money in the coming year(s?). It absolutely will. There are several reasons for this that all lead to less supply of money for startups.
1) There are very few exits in this market. This means venture firms have to reserve more of there capital for follow on investment to get portfolio companies to break even. This means less of their capital going into new companies, especially at the early stages. (the most recent MoneyTree report documents that this is in fact happening)
2) The majority of VC capital (not angel) comes from endowments and such. Endowments use portfolio theory to designate an optimum percentage of investment in ‘alternative assets’ (VC, PE, real estate…). When public markets decline, the percentage of their entire portfolio represented by alternative assets increases. They are forced to slow down or stop putting money into the over-weighted alternative assets until their portfolio is balanced again. This means less capital going into VC funds.

Hence, there is less capital going in on the fund level over all and it has to take companies longer and farther. VCs shift their focus later to adjust, and spread out there existing capital over a longer time. Angels in turn must do the same to support their portfolio companies until they get venture funding. The pace of innovation isn’t slowing down (I don’t think) which means there is less capital to compete for good deals. Fewer deals will likely get done (with more reserve capital), supply and demand leads to lower valuations.

I believe that in the free response you referred to the Angels were largely anticipating these lower valuations (akin to the last down turn). In short startups should anticipate getting lower valuations and more draconian terms than they may have 6-12 months ago if they do get a term sheet.

Cheers
Bronson
Tweeting@BCL

Re: Ten Things I Want On My Mobile Phone

Bronson — Thu, 21 Aug 2008 11:56:52 -0000

#9 I have wasted some time with Jirbobreak. Close enough