Perspective, Pontification and Propoganda about Entrepreneurship and Venture Capital, brought to you by David Hornik of August Capital.

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https://me.yahoo.com/a/VkeufL4sg91JaXXmtL7GAz.KLEtU8A--#e4be2

I am glad to hear that not everyone is lying down and giving up. We have been diligently working to obtain funding for a technology and sports based social network over the last two months and to know that there are people out there that feel that "innovation doesnt take a day off" is music to my ears. Rather it gives us more motivation.

https://me.yahoo.com/a/ESsDKpISmfa1ALc6wGdV_qk1QQ--#8570c

There is another aspect I would add to your equation about venture investing in a downturn. Part of the reason we have downturns can be attributed to the idea that companies just don't need more of the same, hence the decline in purchasing from existing sources. When push comes to shove, companies are finding more fat than value in their current purchasing patterns.
Of course this crisis has many exogenous drivers, but if you look at the current state of tech, it's been very incremental on the infrastructure side for 5-10 years now. This is exactly when disruptive innovations are needed to unlock corporate budgets. If you can walk into the CFO's office and say, "I can save you 30%-50% on your IT SG&A expenses," (and you can prove it) you will get an audience and your message will be hand-carried to the CIO.
These types of innovations are not often created in the halls of the incumbents. First, budgets for innovation fall (not that incumbents are very good at it with more spending). Second, in boom cycles, the talent supply needed to start piecing together these innovations is somewhat low. They have a good option staying in their comfortable corporate jobs. Bonuses flow like wine. In downturns, more people with industry knowledge are pushed into the cold, which creates a greater supply of entrepreneurs for VCs.
So, in some senses you have a perfect storm: a greater need for innovative/disruptive solutions and a greater supply of people who are capable of creating them.
Best,
Jake

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"Some of them will be born out of the crisis itself."

Great quote. In a great economy, money hides problems and opportunities. Companies will get orders whether or not they innovate. But in a bad economy, lowering the water level will expose new opportunities to our corporations. I wrote more about this on Venture Hacks: http://venturehacks.com/articles/water-level

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We have interviewed many entrepreurs on our "Economy Builers" channel...and they all agree this is the time that Innovation will Thrive...
http://www.w3w3.com/Channels/Entrepreneurs/index.html
The mass media along with some help and support from a handful of new media outlets have done it. Their words and pictures have cast a wide cloak of 'fear', 'hate' and 'doom & gloom' in our state, our nation and around the globe. Are there challenges? Of course there are. Pat & I have been married for 37 years, lived in five foreign countries and owned and operated our own companies in those countries and have launched 12 startups. There are always challenges...the time is right!

https://me.yahoo.com/a/ESgFIcUKgOedqkC8PMxA9VsYvSS82iI-#3835e

"Because entrepreneurship is an addiction, it isn't a choice." My first hearty laugh today, because today I learned. . . I'm an addict. Great quote! I too am excited by this economic downturn. Some giants will finally fall asleep and in the space their slumber creates we will experience the awakening of some very cool companies. Great post.

https://me.yahoo.com/a/vNf3cPkF3pRy6m7zbCwHd1Ydgm8z8XE-#8e67d

I truly believe you are right that entrepreneurship is an addiction. Thanks for this great post making us all confront this reality. You did us addicts a service. "I am Shallie Bey and I am an entrepreneur".

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Hi David, Great post. Many would be Entrepreneur's should not bale out early and go on a vacation because you and the other comments are right. It's a great time to have a startup and innovation opportunities are rapidly increasing. I've been thinking about the career alternatives new startup founders have in a recent post http://nickpoint.co.uk/2008/12/18/5-career-alternatives-for-start-up-founders-during-the-recession/

However new entrepreneur's have to get the addiction of the constant startup highs and lows first or they will miss these new innovation opportunities. They also need to have the funds to last the depths of the downturn because many of the Angels/VC's are closing their doors.

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