Amid the overall gloom and doom, Cleantech and Life science companies are doing better than their peers in the Tech sector, according to PwC managing director, Steve Bengston.
So the word is finally out. No, not about the recession which everybody in this country – except perhaps the U.S. government – felt since last year when gas prices were going through the roof, but about what’s really happening in the cosy venture capital world of Silicon Valley today: fire sale of startups; cram-downs, slashing startups valuations; venture capitalists layoffs; venture firms closing, etc.
All fund raising are now A-rounds
And for Pricewaterhouse Coopers managing director of emerging company services, Steve Bengston, it’s 2001 all over again. As a result, companies in need to raise additional funds in 2009 will pay a much higher price for it.
“It’s a buyers market. And certainly a great time for venture capitalists that could get their hands on very good companies and technologies at unbelievably cheap valuations, in the single digit! For entrepreneurs, it will not get better until perhaps 3 or 4 years from now,” predicts Bengston, speaking this morning at the SDForum‘s Quarterly Venture breakfast event.
Entrepreneurs and startups are not the only ones feeling the pain. Venture capitalists do too!
“The Limited Partners (LPs) that are funding venture capital firms are complaining of their investments’ poor returns. Firms will then have to layoff their poor performers while others will just shut down because they couldn’t raise their next fund,” adds Bengston.
Although the credit crunch is hurting Silicon Valley more than the previous Internet bubble burst because of its worldwide phenomena, Bengston sees Cleantech and the Life science as “robust” sectors for the years to come.
[...] attended the SDForum Quarterly Venture Breakfast with PWC yesterday and there was a lot of talk about capital efficiency from the VC panel. Capital efficiency [...]