Crisis Mode: Less Ventured

"We're still looking for deals, but it has to be really cool, breakthrough stuff," Biddle said. "And we have to see that we can take a company to profitability for a reasonable amount of money."

That could bode well for young companies looking for smaller sums to help them get off the ground. Valhalla Partners of Vienna invested $400,000 in MiserWare, a Blacksburg start-up that has developed technology that controls the amount of power a computer server uses, to save electricity.

"There's been a lot of great companies created by early investments during economic downturns," said Gene Riechers, general partner at Valhalla. "What today's environment is like is not a predictor of what it will look like in one or two years when these companies come to market."

But first everyone must overcome their fears.

Jonathan Aberman, founder of Amplifier Ventures in McLean, which focuses on early-stage financing, said the current environment is creating much more anxiety among investors than the tech recession eight years ago. Results of a survey released last week by law firm DLA Piper showed that nearly half of the venture capitalists surveyed believe the current crisis will be worse than the tech crash of 2000.

Aberman's advice to entrepreneurs looking for a first round of funding: "Stay stealthy, hunker down, build your business and come out in the spring."

"Every investor is keeping an eye out for that one rock star deal that may come across their desk," said John F. Hurley, senior executive of the firm's Venture Pipeline group in Reston. "The problem is, the vast majority of what we see today is just another widget, and that's not going to be that home run."

Angel investor John May, founder of the New Vantage Group in Vienna, said angel investors are often most vulnerable to economic droughts. Many angels invest as a hobby because they have large amounts of disposable income. But, since their net worth is often tied up in stocks and real estate, many have taken serious hits this year.

"The good thing is, you can buy a lot more in today's market than you could a year ago," he said. "What we don't know is if in January, will things be so draconian that only those who break even can survive for another day?"

His advice to other angel investors: "Suck it up -- if we're gonna be important in the good times, we've gotta be important in the bad times."

Mark A. Frantz, general partner at Arlington-based RedShift Ventures, may have the most rosy view of the sector. He predicts the local tech community will fare better than other venture capital hubs such as Silicon Valley.

"The Valley is the epicenter of consumer trends, so there will be an impact from a drop in consumer purchases and online advertising," he said.