The deepening recession is speeding up the shakeout in Silicon Valley, forcing droves of start-ups to shut down or sell themselves at fire-sale prices.
I'm not a WSJ subscriber, so I thought I'd search google news for startup. Redpoint Tells Startups to Cut Staff Amid Lack of IPOs, Mergers “If you invest early, and the sales growth doesn’t come, you run out of money at the worst possible time,” said Yang, 49, who founded Redpoint in 1999. Redpoint recommends that startups rank the performance of their staff and eliminate the bottom 10 percent. The firm also told entrepreneurs to impose “zero-based” personnel decisions during performance reviews, asking whether each employee would be hired again if he or she were applying for the first time. ...companies should be happy just to keep sales steady, he said.
I believe the term for firing one in ten is "decimate." Redpoint is telling startups to decimate their staffs. Downturn hits Seattle Startup list, 25 companies gone The ventures shut down, failed to launch, restructured or were sold.
Angels Flee From Tech Start-Ups “Crashes make liquidity vanish, and venture investing — especially angel investing — runs on liquidity,” said Steven McGeady, an angel investor and former executive at Intel.... When David Levine started Wireless Environment, which makes motion-sensor light-emitting diode bulbs, in November 2006, he quickly raised $135,000 from family members and business school friends, with few questions asked. The angel investors he met with this fall, though, were far more demanding. “I could not believe the complexity,” he said... Some made impossible requests... Others would not even meet with him. “I think we have a very compelling business, we’ve hit all our milestones. I set up lunches with friends and they just keep putting them off,” he said.
Imagining tech's post-nuke winter? A preview You know that old cliche about cash being king? These days, it's more like the Holy Roman Emperor.
More Tech Start-Ups Call It Quits - WSJ.com | 
