The markets, of course, seem to be factoring in some probability of collapse. Why is this wrong?

For starters, the biggest subprime mortgage gamblers have already failed, been nationalized or been married off, shotgun-style, to banks run by grown-ups. Yes, lots of small shoes may still drop, but the Paulson "buy-up" bill, and, ultimately, the Fed's ability to print money, provides the Treasury and Federal Reserve all the tools they need. The media don't seem to have noticed, but Section 113 of the bill authorizes government capital infusions into the banking system as necessary -- something the British government is now doing and the Swedish government successfully did in the recent past. That means any bank with a viable business will not be allowed to fail simply because it is temporarily undercapitalized.

Second, Uncle Sam (a.k.a. Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke) is doing precisely what's needed to avoid the mistakes of the 1930s. With credit markets drying up, he's turning on the faucet by recycling our panic dollars back into the financial market.

The government is taking in our money (in exchange for Treasury bills) and using it to make mortgages and buy up the assets we're too scared to hold. It's doing this via the Treasury, the Fed, the Federal Deposit Insurance Corp., the Federal Housing Administration, the Federal Home Loan Bank, Fannie Mae, Freddie Mac and other appendages. It's starting to lend directly to large and small businesses whose usual sources of credit have become unavailable.

In short, Uncle Sam is becoming our new bank. He has also become our new insurance company with his effective purchase of the world's largest insurer -- AIG.

No Depression: Uncle Sam Has Got Our Back

While imploding financial markets have zapped investors into spending paralysis, one Atlanta venture capital firm is going on a $400 million buying binge.

Arcapita Ventures plans to raise a petrodollar-fueled investment fund early next year, aimed at health-care, information technology and industrial technology firms on two continents.

“The best time to buy is when there’s blood on the streets,” said Stephen Fleming, Georgia Tech’s chief commercialization officer, echoing the “buy-low, sell-high” investment mantra. “For somebody that does have deep pockets and a long holding period, this is a good time to be investing.”

$400M fund will invest in U.S., Europe - Atlanta Business Chronicle:

A quartet of Atlanta technology impresarios has launched TechOperators LLC — a venture capital firm geared toward early-stage firms too small and risky to attract traditional VC dollars and too big for angel investors.

Blue chip tech fund raising $30M - Atlanta Business Chronicle:

As everyone is aware, the global economic downturn is upon us and we’re all standing around trying to figure out what this means for all of us — especially us startups. I hope nobody is living in a bubble and believes we’re at the bottom and it can’t get much worse. My prediction, and plenty of others, is that it’s going to get much, much worse and last a lot longer than we can imagine. Maybe decades at this point, although that’s even hard to fathom.

The public markets are going to take a really bad beating and many companies, even companies with fairly strong balance sheets and business fundamentals, could find themselves in terrible terriority - either by a takeover or massive layoffs and cost reductions.

All-in-all, I do believe that this is a necessary cycle - part of the normal cycle of things. If you look at the chart for the past 30 years, we’ve been on the up and up for a long time. An overall correction is due.

I also believe that a large portion of the spiral is psychological. Nonetheless, the spiral will spin out of control for a good bit of time and we all need to be prepared. As a startup, you’ve got some really, really tough choices to make. Some are obvious, some are not so obvious. My advice would be to think long and hard about survival, forget everything you thought you knew a week ago and assume you’re going to have to get heads down and grunt through this. Even well funded startups are going to be in big trouble soon if they’re not careful. All your models, your predictions, yours forecasts and best guesses are gone. Throw them out and assume ZERO.

Jeff Haynie, who's company Appcelerator just raised its series A, talks about startup survival during the meltdown.

The economic downturn and your startup | Introspection

Like other tech hubs, successful Seattle entrepreneurs tend to become angel investors and help the next crop of companies come of age. An example: Pressplane, which recently announced a long list of Seattle angels.

Now those angels are getting a little more organized by investing in the relatively new early stage fund Founder’s Co-op. The fund was first launched last March by (now-deadpooled) Judy’s Book founders Andy Sack and Chris DeVore, and focuses on early stage investments. They typically invest $100,000 - $300,000 in an angel round. To date they’ve made three investments for a total of about $700,000.

Now Founder’s Co-Op has expanded, raising another $1.8 million from a number of well known Seattle entrepreneurs: Ben Elowitz (Wetpaint, Blue Nile), Alex Algard (WhitePages.com, CarDomain), Adam Brotman (Play Network), Andy Liu (BuddyTV) and others.

Seattle’s Top Entrepreneurs Band Together To Invest In Local Startups

Hundreds of millions of dollars in production financing will be committed to fill slates for 2010 and 2011, signaling the end of the de facto thesp strike that has kept pic production at a low ebb for nearly a year.

With a handful of exceptions, the majors mostly stopped greenlighting films in October 2007, which led to a large number of productions that wrapped before June 30.

Studios are ready to replicate that pre-strike rush by creating the same kind of boom market for production starting early next year.

Studios prep major film production - Entertainment News, Film News, Media - Variety

A lot of supplies have now recovered and about half of the local gas stations seem to have fuel based on my unscientific guess while driving around. A lot are still totally dry. But even with a lot of stations still without gasoline, the lines have disappeared. It has probably been 3 or 4 days since I’ve seen a line for a gas pump. In fact, I’ve seen some stations with gas and no one is at any of the pumps.

So what does this all mean? To me, it means that we have too many gas stations. If the number of gas stations that are currently serving fuel were not sufficient to fulfill demand, there would be lines. Since there aren’t lines, that means there is a sufficient amount of fuel, and more importantly, enough available distribution locations for the current level of consumption.

Too Many Gas Stations / (Sanjay_Parekh) == (Rambling)

For the next Open Coffee, we’re heading to Norcross. It’ll be October 14, 2008 from 1pm until 4pm (note slightly earlier start and end times).

If you’re an entrepreneur, angel investor, or VC you’re welcome to join us. If you’re not one of those three things, you’re welcome to stay away from this get together.

Feel free to RSVP below or on the Upcoming event. Or don’t and just show up. Whatever.

Also, do you find keeping up with these local events tough? If so, I’ve started an announcements only mailing list that you can subscribe to. Just send an email to atlstartups-subscribe@yahoogroups.com and you’ll get the announcements. I plan to keep the list postings to about one every few days at most but in no case more than one a day. Or you can just keep coming here to read the latest event scoop.

Open Coffee - Norcross.

Atlanta Open Coffee - October 14, 2008 / (Sanjay_Parekh) == (Rambling)

Venture Atlanta has graciously donated 2 tickets to START Atlanta for their upcoming event on the 15th of October. We are giving these tickets to the Atlanta Startup community to help include you in more local events. If you would like to win a ticket (valued at $250) to attend this three day event, please leave a comment below this post and tell us what you want to get out of the event if you go. We will be giving away both tickets but only one for each company.

Venture Atlanta will feature Georgia’s most promising high-growth companies presenting their plans and investment opportunities to more than 100 top-tier venture capitalists from across the country. With speakers from Cisco Systems, Turner Broadcasting, The Weather Channel, Clearleap, Flybridge Capital Partners, Noro-Moseley Partners and our keynote Bernie Marcus.

For more information, check out our events calendar to the right.

Win Tickets to Venture Atlanta 2008! | START Atlanta

Venture Hacks header image 2
Our top 10 term sheet hacks
September 23rd, 2008

Venture Hacker Naval Ravikant recently presented our top 10 term sheet hacks at Startup2Startup:

(Here’s a pdf of the presentation if you don’t see the slides embedded above. Or read it on Slideshare).

Naval’s slides are a must-read—and a great summary of our detailed hacks.

Slideshare has a transcript of the slides on a single page if you don’t want to flip through the presentation (scroll to the bottom of the page). Mike Speiser has put up his notes from the presentation. And finally, here’s a video of Naval describing his investment criteria:

Venture Hacks — Our top 10 term sheet hacks