The Economy of Startups

A buddy of mine with quite a lot of start up experience recently answered a question I sent him in an email.

What's the startup environment like there? Do you notice people getting nervous about the economy?
From where I sit it looks like it's the start of a recession - not the best time for internet startups.

He mentioned:

1) The venture cycle is pretty long... funds are raised and invested for years. ...
2)... If anything, [investors] may pull their money from RE and the stock market and look for alternative investments, such as VC or angel investment.

Then, a few days later a blog was written by Jeff Bussgang. Eric saw the article pointed me to it. A quick a citation from an article:

My advice to entrepreneurs - don't wallow in self-pity about the negative impact the economy will have on your 2008 performance. Instead, this is a great time to hunker down, steal incremental market share and build a valuable company that will be poised to take advantage of the predictable upturn around the corner.

The blog in whole:

http://bostonvcblog.typepad.com/vc/2008/01/whos-afraid-of.html