Angel Investor Ron Conway Adresses His Portfolio Companies Over Financial Meltdown

RE: Market Conditions Effect on Angel Investors, L.P. Portfolio

Companies

The down draft in the stock market sends us some obvious "signals" and we can't help but mention them.

1. If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible.

2. Many companies are ignoring certain VC leads we've provided in order to concentrate on the top tier only. While we have preached that in the past, this is no longer the case. Currently, top-tier VC

bandwidth constraints, coupled with the market down draft, make it very important to take meetings with any VCs where you can get their attention. We have been working hard to open up this new bandwidth.

3. You must aggressively examine and pursue M&A opportunities (unless you have over 12 months of cash reserves!) ro insure you have critical mass (including funding, customers, rolodex power, market

share, cash, synergy, etc.).

4. Be realistic on valuations - they will fall so be ready and willing to co-operate.

5. Look for corporate partners to invest so you can raise more money. You should also consider a sale of your company to your corporate partners.

6. If you are entering a funding cycle start raising money sooner rather than later.

7. While it's safe to say entrepreneurs have had negotiating leverage with the "down draft" in the market, the VC community will start exercising their leverage.