ATLANTA – Venture capitalists at the Southeast Venture Conference say they’re still doing deals-but fewer and spending more time on those they do.
The two-day SEVC, which drew more than 700 people to the Intercontinental Buckhead, concludes today with additional panels discussions and a keynote address by Rich Karlgaard, publisher of Forbes magazine.
During the event’s “State of the Market” panel Wednesday, Patrick Kerins, general partner at NEA said, “We used to average two or three new deals a month, now it’s down to one.”
Kerins also said NEA is focusing on earlier stage deals of late. “We’d like to do later stage deals, but the kind of companies we like are doing everything they can not to raise money now.”
Still, Kerins said, “Even though the general mood is awful, we don’t want to take a year off. We feel if we don’t do a number of them in 2009, it would be a mistake.”
Neil Sequeira, general partner, General Catalyst Partners, said, “We’re still actively doing deals, but the bar to get them through is higher.”
Wayne Hunter, managing partner at Harbert Management Company, said, “First we’re taking care of our portfolio companies.” He added, “We’re actively looking for deals, but the bar is high.”
Said Mohammadioun, managing partner at Tech Operators, a new Atlanta fund, said starting a new fund in this environment has some advantages. “We don’t have portfolio companies,” he said.
Kerins suggested that companies closing venture deals in this climate should make sure they’re funding operations for at least 12 to 18 months.
Venture capitalists on the “Raising Money in Today’s Market,” panel included Tim Draper, manging partner of Draper Fisher Jurvetson, one of the largest and most respected West Coast venture firms.
Draper said DFJ looks for deals in personal healthcare; cleantech, mobile devices, social networking as business applications, and breakthroughs in power generation.
Pascal Luck, managing director of Core Capital Parners, who says he bills the firm as “the closest to the White House,” echoed VCs on the other panel, noting that deals “are just taking a little longer. Every deal is looked at a little harder. Everybody says, ‘Let’s turn this deal over a few more times.”
In some cases, Luck said, “In some cases you may not be able to sell a deal to your partners. The internal discussion to get these things done has ratcheted up.”
Christoper Morton, CEO of Skycross, which recently closed a substantial deal, said taking venture money now is a matter of “Can you make more with that investment than through organic growth.”
Skycross, which sells innovative high tech antennas for a variety of devices, believes it can and that it gives the company leverage in this market.
He noted however that the deal itself took a long time.
Look for photos from this year’s SEVC event in thsi week’s TechView Atlanta Friday.
Southeast Venture Conference, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA – Where Smart Money Meets Smart People.
www.seventure.org
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