The fourth quarter of 2008 was tough. Investments plunged by nearly a third to $5.4 billion as compared to an average of about $7.7 billion for the past few quarters. What the future holds was the focus of the Annual VC Outlook Dinner event hosted by TiE-Boston on January 29^th, 2009. The panelists consisted of:

• Ajay Agarwal of Bain Capital
• Axel Bichara of Atlas Ventures
• Bob Higgins of Highland Capital Partners
• Doug Kingsley of North Bridge Venture Partners
• Hemant Taneja of General Catalyst

The event was moderated by Rob Weisman from The Boston Globe.

“Given the economy, most VCs are focused on evaluating their current portfolios,” said Agarwal. With the initial public offering and credit markets nearly frozen, VCs had to spend more money to keep the mature companies in their portfolios going, leaving less for new ventures.

“Quitting your corporate job to start a new company in today’s market is asking for divorce,” said Higgins in what he called a “divorce syndrome”.

According to Taneja, “On the brighter side, for start-ups who have managed to jump hoops and raise money in this tight market, the availability of talent to recruit has never been better.”

Everyone agreed that as of result of this crisis, the valuation are now more reasonable, there is more due diligence on part of the VCs, the start-up are more strategic and only the best ideas and a couple of start-ups in each area are funded. On one hand the panelists were optimistic but on the other hand it was evident that they were not ready to make new bold predictions for the future as they had done in the past.

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