Ron Conway, one of the most prolific angel investors in Silicon Valley send an email to all the CEOs in his portfolio companies, giving them some war-proofen advice on how to weather the current market conditions. TechCrunch has the full story and also the complete text of his email - go read it, it’s very worth it.

In the last couple of weeks I had a lot of questions and discussions from and with startups both in Germany and the UK - they are obviously all concerned about the current market conditions and want to know what this means for their financing. Conway raises a couple of really good points which I can only underline - the two most important things to do at the moment are:

• Lower your burn rate to give you another 3-6 months runway. The more time you have, the more likely it will be that you will survive the current shake-out.
• If you are currently raising capital - raise as much as you possibly can (even if that means you need to give up more equity than you originally planned to do). Again - more money buys you more time and more time will give you a significantly better position to weather the storm.

I would add to Conway’s points that this is an exciting (though tremendously hard) time - personally I predict that companies who survice the current market conditions will be the big winners a couple of years down the line (very similar to what happened after the crash in 2001). So - if you can stand the heat, it’s a great time to start a company! Seriously.

Posted in Analysis, Entrepreneurship