
Falling Valuations: Poison for Venture Capital - newacc
http://bits.blogs.nytimes.com/2009/08/07/falling-valuations-poison-for-the-venture-capital-industry/?ref=technology
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grellas
In today's down environment, cash is king and any startup that has short-term
capital intensive needs, and no way to meet them apart from VC funding, is
going to get lousy terms - the first of which is a much lower valuation
relative to what it would have been a couple of years ago. That means major
dilution at best, _assuming_ such a startup can get funding at all.

Even so, bootstrap startups are proliferating in Silicon Valley (and I assume
elsewhere) and will be in line to approach VCs down the road if they deem it
desirable, but on much better terms and with much higher valuations. For
founders in today's environment, patience, perseverance, and frugality are the
key. Opportunities abound but VCs are no longer the sole or even primary entry
point toward realizing them.

