Sarah Palin is quoted as saying, “Thanks but no thanks on that bridge to nowhere.” Howard Hartenbaum, who was an early investor in Skype in 2002 and who joined August Capital this fall, would agree – in the context of investments.

“Many
people think the economic problem is all related to debt, and I tend to
agree with that,” he said. The big change going forward is that a lot
of companies will be funded by equity and not debt, he said. “There’s
going to be very few cases where companies can raise bridge funds,” he
said. “The great majorty will be equity and the prices will be
considerably lower than the entrepreneurs have been gettng for the past
couple years.”

Hartenbaum, who made the Forbes’ Midas List
of top venture capitalists, spoke on a panel at the AlwaysOn Venture
Summit
in Half Moon Bay this week. His panel included angel investors Ron Conway,
Jeff Clavier and Aydin Senkut. Sam Angus, partner at Fenwick and West,
was the moderator. In this video, Angus asked Hartenbaum whether it was
a good time for smaller venture funds.

Hartenbaum’s answer? Yes.

If
bridge financing funds are harder to come by as Hartenbaum predicts,
then the environment becomes much more favorable to venture capitalists
and early-stage ventures. The reason being that angel investors won’t
want to do a debt round, and won’t want to do the paper work that goes
into an equity round.

 

Support VatorNews by Donating

Read more from related categories

Related News