My Lessons In Venture Capital and Banking All In One Day

I began my very busy yesterday at the "DLA Piper Venture Pipeline Breakfast". Great panel discussion with Paul Hurdlow (DLA Piper), Matt Blodgett (North Bridge Growth Equity), Jeff Diehl (Adam Street Partners) and David Lack (Austin Ventures) updating the crowd on the going ons in the venture capital world. There is still money being raised and companies being funded. That is the good news! But it seem like there is some waiting to see the third quarter numbers. While I got an optimistic feeling... I my personal opinion is there will be some waiting before we too much movement in investments.

I also wonder if the financial crisis will shut down angel investing as people circle their personal finances.

Interesting to me is the fact that Austin still gets 53% of all venture investments in the state of Texas. The entrepreneurial spirit in Austin still has access to cash, but I think we still need more fresh investments in new companies in order to fuel the future we are counting on in Central Texas.


I went on to have lunch with some great folks from one of the major banks (wont name them, as I assume nobody in the banking industry wants to have their private conversations appear on a blog!). While the evening news focuses on the woes of the banking world, these seasoned bankers have seen ups and downs before. They were not excited about the near term future (it sucks).... yet they seemed to have the experience to know we will come out the other side. The bank / S&L crisis of the 80's was a painful time for bankers.... but there eventually did come a light at the end of a very long tunnel.

The announcement today about the collapse of Washington Mutual is not a good sign. Fasten your money seat belt, as we are seemingly again in that gloomy tunnel.

I am worried that we have a long, long road ahead until the credit markets un-freeze ---- regardless of what Congress does this weekend. Sad, but probably true.

So my nuggets of knowledge from yesterday: there is still money out there if you have a good company with an appealing idea. Venture funds have cash and want to do deals, but if you are more established and have any hiccups on your balance sheet... beware of getting a LOC anytime soon!

Have A Great Day



thom