Silicon Valley Finances
On page b1 of today’s WSJ (2/15/08) there is a very interesting article about the finances of Silicon Valley start-ups, In Silicon Valley, Start-Ups Hitting the Breaks. Bottom line, venture investors are telling high tech start-ups to build up their financial strength. The bad news is that these high flying and very aggressive investors are playing defense. Start-ups usually get cash for expansion because they draw their financial strength from expanding sales. The good news is that these venture investors remember the dot com bust of the ’90’s and are acting responsibly. Still it’s like your all-star quarterback telling his best wide-receiver to be ready to tackle the corner-back on the next play.
It is not a positive thing when the people who the economy expects to be the most aggressive and optimistic players on the team are talking defence. From a personal or business finance viewpoint, it might be a good time to play some financial defense.
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