This is the questions that journalists are asking us most often these days. Broadly, what are seeing is as follows:

  • Portfolio companies are still going strong, and have made the adjustments required to tide through the current environment. This applies both to potential business impact (in cases where there is slowdown in customers’ purchasing behavior), and to planning follow-on rounds of investment. Unless there are more major shocks in future, things should be under control here.
  • Deal flow is still strong – we haven’t seen any drop in deal flow, nor in new companies being started. If at all, we are seeing some more push amongst senior talent to do a startup now. Can that last? I dont know. If overall level of financing remains low, I think it may have impact on new businesses being started – especially those that seek venture financing.
  • Venture financings are clearly down – the bar is higher, some funds have run out of money, and other such causes. Later stage valuations are more reasonable, but not necessarily at a level where markets are clearing – perhaps may take a few more months to get there.

What is your sense on the above? Are you seeing people around you getting more aggressive or conservative regarding starting out? What change of behavior are you seeing amongst VCs?