@ EconSM: Deals And Dealmakers: The Outlook For 2008

This story was written by Joseph Weisenthal.

Economy and outlook for 2008: Geoff Yang, Redpoint Ventures: "There's been a lot of money raised in the venture business, but there aren't that many spaces that have a lot of wind in their back as such, you have a lot of money wanting to investing in the consumer internet that's been pushing extremely high valuations." Companies are worried about the economy, and want to tank up, raising big amounts of cash (especially among later stage companies). However, even if thiings slow down, there will still be a big backlog of cash looking for a place to park itself. "I would expect that the number of acquisitions that have been done at recent prices will go down" But, for the next 2- 3 years, there will still be a vibrant M&A market. Ross Levinson, Velocity Interactive Group: "We're coming to the end of the cycle." But that's not because things are dying down, as Levinsohn claims to be seeing more innovation than ever before. It's just that this innovation is accompanied by compression. He added that his firm is telling companies to preserve cash and look out for good buyout opportunities: "You're going to see some big names have to take down rounds." (You can probably take some guesses on who that would be). Michael Hirshland, GP at Polars Venture Partners, declined to predict what economic effects there would be, and argued that to some extent, startups are economically immune.

By Joseph Weisenthal