Risky Business, What’s Next for the Success of Venture Capitalists?
Like many start-ups, Influent is in the process of raising its next round of funding. The current economic crisis has created one of the toughest environments ever for start-up companies to obtain the funding critical to enable growth. According to Rebecca Buckman of Forbes.com, a prominent Silicon Valley investor stated that VCs “have been living off fumes for a long time now”. Returns and morale are low.
To compensate, VCs are demanding higher standards of diligence and taking advantage of market conditions to drive better terms, creating much lower pre-money valuations for start-ups. This ‘tightening of the belt’ only works to a certain degree. It’s once again time for VCs to embody their prospecting name, to make high risk/high reward investments. ‘Safe’ investments won’t always transform the marketplace or offer the high returns that are necessary to build VC funds. The current state of the economy might be abysmal, but this environment has the potential to drive VCs to invest in unlikely start-ups. Perhaps the next Google or Cisco will emerge.
Despite the economic downturn, there are VCs across the country participating in forums to find the next it company. Take Early Stage East for example, a conference held in Baltimore, MD to match start-ups with VC investors. The video conference coverage by Forbes.com, details the useful connections and feedback that entrepreneurs receive as conference attendees.
Some tips from VCs for pitching a company – branding is key, make outside references and resist that overwhelming temptation to overcrowd your slides.
