In this guest article on the Sun Microsystems web site, Guy Kawasaki lists the five most important lessons he’s learned as an entrepreneur — which makes for great advice for entrepreneurs:

1. Focus on Cash Flow
2. Make Little Progress Every Day
3. Try Stuff
4. Ignore Schmexperts
5. Never Ask Anyone To Do Something That You Wouldn’t Do

Sound advice from someone who knows. I’ll add one more thing that I think is the most important lesson of all:

6. Do What You Love

When you love what you are doing, you will pour your heart into in and it will show. And, whether or not your startup is a big success, you will have done something you enjoyed and will have no regrets for having started it.

© Eye on Startups & The Startup Guidebook

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An article in this week’s Mass High Tech reports New England (NE) Venture Capital (VC) financings dropped 31% in the number of deals done during the second quarter, as compared with the same period last year, according to a new report from Dow Jones VentureSource. This drop represented a decline of 22.4% in value over the same period last year.

The decline in New England venture deals is significantly worse than the drop experienced nationally. The value of VC investments in the U.S. dropped 12.4% during the 2nd quarter compared compared to the same period last year.

This news comes on the heels of my post last week, which reported on the growing pessimism from VCs nationally.  It doesn’t look good…

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In a July 24th story, the New York Times reports that according to a survey of venture capitalists (VCs) by tax and advisory firm KPMG, VCs expects the current Initial Public Offering (IPO) doldrums to stretch until at least 2010. As a measure of this pessimism, only 9% of those surveyed think it will pick up next year and only some 12% think the IPO market will ever reach its historic highs.

This dearth of IPOs and successful exits has some dire consequences for startups. Where there’s no exit, VCs are forced to invest any new money into their current portfolio of companies to keep them going, rather than invest them in new ventures. This is consistent with an earlier post where I reported that VC activity was down during the first quarter of 2008.

If you are just starting up and looking for money, then you should consider approaching angel investors. As previously posted, angel investors appear to be taking up the investing slack.

If you are a startup that has money in the bank, consider yourself lucky. But with the current market conditions, its time to tighten the belt just a bit and perhaps conserve your cash. Hold off on any big purchases; after all, maybe the team can do without those brand new notebooks until next year. You never know how long it will be before VCs’ purse strings will loosen up….

© Eye on Startups & The Startup Guidebook

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