At the Dow Jones Wireless event, I was fortunate to meet up with Ammar Hanafi, General Partner at Alloy Ventures, who spoke on the morning panel.  Hanafi, formerly of Cisco Systems mergers and acquisitions team and involved in 100 M&A deals, focuses on infrastructure, as well as internet-enabled consumer and enterprise applications and services. He currently sits on the board of GigaOm and YouSendIt, to name a few.  

(Below is the edited version of my interview with Hanafi)

MS: How is the climate for investing right now?

AH: I think it’s tough out there and all over. I think the venture industry is reacting rationally. I think what we are doing as an industry is supporting our existing companies and trying to find the best new opportunities for investments. But I think that people in our business are just as surprised by the depth of the downturn as everywhere else. But I am a VC, which means I am a professional optimist where I expect things to turn around in our business. Our business is always built around building new companies, which means there is always going to be adversity. This means there is always someone’s lunch you are eating. These tough circumstances have positioned us better than in some ways in traditional industries to react optimistically.

MS: Are you currently making any investments?

AH:  Yes, we are. We are looking to support our existing companies as well as looking for newer opportunities. I think everyone’s bar has risen higher in the venture industry because we are a function of our environment and I think this environment is making us tougher because you have to build a business as well as find that syndicate partner in a very difficult time.

MS: Are you worried about exits for startups or do you think M&A will pick up?

AH: I used to run mergers and acquisitions for Cisco so I know that good companies will be looking to pick up great opportunities.  I think the important thing for us is that the market will stabilize and re-open for startups because you don’t have a vibrant exit environment until you have a vibrant public market. So I am very hopeful with the new administrative policies  and the economic market in general that those public markets for our companies will come back. I don’t see that happening in 2009. I see that happening in 2010 before we see those public markets reopening.

MS: Give me a couple of predictions for 2009 that you are seeing in mobile.

AH: I think the mobile environment is one of the bright spots in communications because it’s still growing. Mobile devices are being sold. More applications are being accessed and being written, and usage continues to go up. When you think about what you want to invest in as a growth investor, it's that you want to find things that are fundamentally growing. I am predicting that we’ll continue to see  great applications hit on the iPhone and other environments. I think the  Blackberry apps will be very interesting to watch. If you pick and choose your battles, you will be able to build the next-generation infrastructure which is a tremendous opportunity. If you have the right technology and company that can supply that to that market, then you are sitting on a goldmine.