Wednesday, January 21, 2009

Optimism Lives!

It's great to see David Hornik posting again on VentureBlog.  He's been on hiatus since the end of October, and his perspective on the private equity asset class has been sorely missed.

His latest note offers cautious optimism for the future of venture-backed technology startups.  It's a welcome notion after the beating the economy has taken lately.
So why am I optimistic about investing in 2009? Because entrepreneurship is an addiction, it isn't a choice. Great entrepreneurs aren't driven to create companies because it is easy, or because capital is plentiful, or because the public markets are swallowing anything the venture community will throw at them. Great entrepreneurs start companies because they can't help themselves. They see a problem or a solution or white space or an opportunity and they have to do something about it.
Indeed, there may be no better time for an entrepreneur to start a new business.  Some of the best and most successful companies were started during downturns, and there are some very important competitive advantages to doing so.  "Me-too" competition is stifled, pain in the market caused by economic disequilibrium seeks relief that only innovation can provide, and investors still must deploy capital, even if LPs are thin on the ground.

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