Fred Wilson: Startups should expect raising VC to get ...

thedealvideo 2008-09-24

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"People are going to be more conservative," says venture capitalist Fred Wilson in a video interview with Tech Confidential about the impact of the crisis in the capital markets on the technology industry. "Everyone's going to think harder about writing a check for anything," says Wilson, whose Union Square Ventures backs microblogging firm Twitter Inc. and other Web 2.0 startups. "There are times when people want to take risks and times when people don't want to take risks. Clearly, no one's going to want to take risks right now." For entrepreneurs, that means it will be harder to raise money. But not impossible. "Good ideas are still going to get funded," says Wilson, who squeezed in a quick chat with us at Web 2.0 Expo between giving a presentation and watching one by Maria Thomas, new CEO of his portfolio company Etsy Inc. One major reason Internet companies are less vulnerable today than a decade ago: They cost less than one tenth to operate than they did then. "Most companies back then had million-dollar-a-month burn rates," Wilson says. "Today, Union Square's portfolio companies are spending $50,000 to $70,000 a month, or $600,000 to $700,000 for the whole year. In this environment, that's a much healthier place to be." Check back later for video interviews with conference organizer Tim O'Reilly, the creators of online video show Lonelygirl15 and others.

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