The goal right now is to survive. Former multimillionaire tech executives have become mendicants, begging for capital to keep body and soul together. With the Nasdaq in free fall, money-losing tech companies can't tap the equity markets. Investors are treating them like toxic waste. Meanwhile, the flow of venture capital is slowing.
New companies can still raise money, but it's much harder.
Venture capitalists are acting like MASH units frantically patching up badly wounded troops. Diverting capital into companies in their portfolios, they are hoping to keep their existing investments afloat until earnings materialize or financial markets change. VCs are finding it harder to replenish their own capital stock. Companies they hoped would go public haven't because the stock market has collapsed. And the ones they hoped would be acquired haven't been because the potential buyers don't have the cash either, Burns says.