Doubts Short-Circuit Digital Summit
Like a debutante at her ball, the Digital Orange County networking group was celebrating its first year in existence with an inaugural conference and was expecting as many as 200 entrepreneurs to attend the affair this week.
But with a weak economy and less venture capital available, there was scant interest--only 50 people committed--and the two-day Entrepreneur Summit at Chapman University in Orange was canceled.
“People are cautious . . . in this climate, partly because there’s a perception money’s very difficult to raise,” said Billy Fried, executive director of Digital Orange County.
The group’s disappointment is being played out across the region as tech companies are laying off thousands of workers, reporting huge losses or lower profits and seeing little comfort in the near future. On Friday, telephone equipment maker Nortel Networks Corp. said it will slash 10,000 jobs--on top of 20,000 layoffs earlier this year--and post a quarterly loss of $19.2 billion, one of the biggest in corporate history.
Attendance has dropped sharply at many digital networking events, and even the hippest groups, such as Virtual International Community, formerly Venice Interactive Community, are laying off people and struggling for sponsors. In March, about 1,000 people went to the Los Angeles Venture Assn.’s annual investment capital conference, nearly 29% fewer than at last year’s event.
“I think there’s a much smaller pool of entrepreneurs than there was before the dot-com crashes last year,” Fried said. And those who are looking for investor money fear their proposals won’t get financial backing until tech companies get out of the doldrums, he said.
Venture capital investments in Southland companies dropped 28% to $870 million during the last three months of 2000 from the previous quarter, according to data service Venture Economics. With the plunge in tech stocks and the economy’s turbulence, venture capitalists often are bypassing start-up businesses in favor of propping up firms they’ve already invested in, experts said.
Still, some digital networking events are drawing large groups.
Tech Coast Alliance attracted 1,000 business leaders Wednesday to the Queen Mary in Long Beach for the launch of its networking efforts worldwide and the introduction of its new magazine.
“We’re thrilled we’ve weathered the storm,” Tech Coast spokesman Camron Bussard said.
But he acknowledged that a lack of corporate sponsors and flagging interest have limited the number of high-profile events the Irvine group has held over the last year.
Fried said the event was scratched Friday, but his group is undaunted. It is considering hosting a networking event in the fall, probably limited to one day, and setting luncheons and half-day events.
