Startups Less Viable but Winding Them Down Is a Booming Business

PUI-WING TAM and BEN WORTHEN report of in the Wall Street Journal that investors are investing less and startups are worth less as the recession hits Silicon Valley. In More Tech Start-Ups Call It Quits the authors describe a dire economic environment for entrepreneurs but also point out that firms such as Sherwood Partners, a Mountain View, Calif are profiting by "specializing in winding down start-ups...averaging three start-ups a week, up from just one or two closures a month in September", according to their managing director Martin Pichinson.

Martin Pichinson, Sherwood Partners

CEO and Venture Capital Required Reading Alert!!!

From extraordinary entrepreneur Mark Cuban comes The Mark Cuban Stimulus Plan - Open Source Funding. Every entrepreneur and financier, whether professional VC or angel investor, of early stage ventures should stop what they're doing right now and read this plan....and then read it again and again!

As Cuban says "So here it is. Some people will love it, some will hate it. It is what it is."

I love it!

Guy Kawasaki Speaks Out About Venture Capitalists and CEOs

You can always count on Guy Kawasaki for the balanced truth!

In Top 9 Lies of Venture Capitalists he warns entrepreneurs to check carefully to see from which side of their mouth a venture capitalist is speaking. Guy says "Venture capitalists are simple people. But we're not necessarily forthcoming, so if you think it's hard to get a "yes" out of a venture capitalist, try getting a conclusive "no." The game is to string along entrepreneurs in case something miraculous happens to make them look better."

In 6 Helpful Clues for CEOs he updates the list he started in October and asks CEOs to check whether they "stack up" and to show they "are clued in and on top of things".

Special thanks to west coast beat reporter Jeff Saunders for his contributions to this.

The Secret to Start-Up Success: Save Customers Money

By Claire Cain Miller | NYTimes.com

"These days, venture capitalists are ever more cautious with their money. The way to catch their eye? Pitch a company whose mission is to save customers money."

Why Stock Option Compensation Will Kill Your Company

Anne-Marie Fink | Silicon Alley Insider

"Anne-Marie Fink is the author of "The Moneymakers: How Extraordinary Managers Win in a World Turned Upside Down" and runs the Money Makers site. Here's an excerpt from the book:

Paying as many employees as possible in stock is an article of faith to both corporate leaders and people in the investing community. I risk being branded as a heretic, therefore"...

Startups Critical for Job Creation in U.S.

By Scott Allen, About.com Guide to Entrepreneurs since 2002

"A new U.S. Census Bureau study funded by the Kauffman Foundation strongly suggests that it is not just small businesses, but new businesses, that hold the key to reversing the current record unemployment trend. The Business Dynamic Statistics (BDS) indicate that without job creation from new firms, the U.S. net employment growth rate is negative on average."

Google Next Victim Of Creative Destruction? (GOOG)

John Borthwick | Silicon Alley Insider

"Search is fragmenting into verticals. In the past year two meaningful verticals have emerged — one is video — the other is real time search."