Last week, PricewaterhouseCoopers and the National Venture Capital Association released the MoneyTree Report, a summary of venture capital investment in U.S. private emerging companies, which indicates that 2009 VC investment was down to its lowest levels in more than a decade.
“First-time financings fell to the lowest dollar level and deal level since the MoneyTree began reporting venture capital investing in 1995.”
Pouring gasoline on a burning house does not help raise spirits, I realize. But the report does confirm that financing dollars were in 2009, and likely will be in 2010, exceedingly difficult to obtain. You can either concede and start your job search (more bad news), or you can buckle down and prepare for the turnaround.
I do not doubt that investments will reach their peak levels again, as the abundant cash that is on the sidelines now will eventually fund the next wave of innovative companies. Until then, or if you are actively seeking financing now, you must ensure that all ducks are in order within your company.
> You must have a solid strategy and business plan.
> You must understand the hurdles facing your business and be able to articulate how to overcome those hurdles.
> You must be prepared for the business and legal due diligence process.
> You must have a strong management team with relevant experience — both technical and business.
