Mike Drzal Offers a Venture Perspective on the Current Financial Market
Mike Drzal, attorney with LeClairRyan, introduced a panel discussion, The Current Financial Market and Its Impact on Innovation in the NewVa Region, arranged by the NewVa Corridor Technology Council, NCTC, on November 13, 2008.
Mr. Drzal was kind enough to share an outline of his comments with Handshake 2.0:
LeClairRyan is an entrepreneurial law firm, representing clients in matters of corporate law and high-stakes litigation. We are a national law firm, which gives us a unique perspective on our local financial market.
I head LeClairRyan's Technology Company and Venture Capital Practice, consisting of 14 attorneys in 5 different offices: Blacksburg, Roanoke, Richmond, Virginia Beach and Newark, New Jersey.
Here is our take on what is happening in the emerging company arena. This is a venture perspective as opposed to the banking perspective you will hear from our panelists.
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Deals are still getting done, BUT they are taking longer and deal terms are harsher.
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Equity financing sources are being more selective. It is a buyer's market.
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Valuations are coming down and we are seeing down rounds.
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A new rule of thumb is that a company needs to raise enough to get to cash flow neutral. There is no guarantee of follow on rounds.
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The angel market is alive and well. For example, NERD energy and focus drink funding was offered on the spot at last week's Annual Business Forum in Charlottesville.
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Cash is king.
Here is what our firm, LeClairRyan, is doing:
We are viewing this as a great opportunity to expand and pick up new talent. We just hired a patent attorney from a large national firm and are looking at this situation as a chance to build in that area and others.
We are doubling our marketing efforts.
This, too, will pass and those who seize the day will emerge the winners on the other side of this downturn.
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Thank you very much, Mike Drzal.
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The panel for The Current Financial Market and Its Impact on Innovation in the NewVa Region, arranged by the NewVa Corridor Technology Council, NCTC, on November 13, 2008, consisted of Ed Lawhorn, SunTrust Bank, Allan Funk, Branch Banking & Trust, BB & T, Brad Denardo, National Bank of Blacksburg, and Karen Turner, StellarOne Bank.
