Valuations of private companies have dropped significantly, not just because of the decrease in public market valuations, but mostly because of increased risk for investors. Market risk has increased significantly, particularly for newly emerging technologies in a decreasing technology spend environment for large enterprises.
In addition, given the amount of venture capital invested in early stage companies in the past couple of years, the competition in newly emerging categories is more intense than in the past. Financing risk has also increased substantially for private and public companies.

With the public market no longer willing to take a risk on newly emerging business models, VCs have been much less willing to fund “non-traditional” business models and management teams without significant experience. Finally, technology risk may have actually increased, as companies often have to choose a particular standard around which to build their product that may not yet be widely adopted by the market.

So what does this mean to you? The focus of your energy should be milestone driven and not financing driven. Build a business plan around achieving milestones off of which you can finance your next set of milestones. While this appears basic, in the past couple of years it was taken for granted by entrepreneurs that financing was time based (“this cash will last the company six to nine months, so we will begin raising our next round in four or five months”). Given the above risk metrics that VCs think about, a company’s ability to prove its value proposition to a customer while eliminating or diminishing specific risks in its business creates financeable milestones.

If you have more query about magazine please send mail to

May 12	April 12	March 12	Feb 12