Venture capital funding in Southern California falls off a cliff
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Tony Katz had big hopes for his Porter Ranch company, Aweli, when he first started looking for venture funding in late 2007. He was sure its method of monetizing online videos would appeal to investors.
Twelve months later, he’s kind of given up.
‘There’s no math that we can do that in this economy that shows it making sense to go after venture money,’ he said. Instead, he’s trying to run the company on existing cash. ‘As we see it, if you can’t run a company on the dollars that you have, you don’t have a company. Those days are over.’
They’re over for many companies seeking venture cash. Nationally, the amount of money invested in the fourth quarter of 2008 dropped 30% to $5.5 billion from the previous quarter, according to just-released numbers from Dow Jones VentureSource. In Southern California, the amount of money invested fell 45%. The number of deals nationwide fell 23%
For more depressing figures on the sorry venture climate, check out this story.
-- Alana Semuels