Angel Investor Ron Conway Adresses His Portfolio Companies Over Financial Meltdown

I have pasted in the emails I sent on April 17th 2000 and May 10th 2000 and every word applies today.

Unfortunately history DOES repeat itself but I hope we can learn from history and prevent the turmoil from occurring again.

The message is simple. Raising capital will be much more difficult now.

You should lower your "burn rate" to raise at least 3-6 months or more of funding via cost reductions, even if it means staff reductions and reduced marketing and G&A expenses. This is the equivalent to "raising an internal round" through cost reductions to buy you more time until you need to raise money again; hopefully when fund raising is more feasible. Letting go of staff is hard and often gut wrenching. A re-evaluation of timelines and re-focus on milestones with the eye of doing more with less will allow you to live many more days, and the name of the game in this environment in some

respects is survival¿survival until conditions change.

If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible but face the fact that if you can't raise money now you must cut costs.

While I do not own a large percentage of your company I hope you will consider this thoughtful advice.

I was here in 2000 and want to share what I learned through many years of experience and historical "pattern recognition"!

Here are the two emails from the year 2000 that I referred to above and all the statements apply in today's market:

To: Angel Investors, L.P. Portfolio CEOs

Date: 04/17/2000 05:24 PM

From: Ron Conway