“Fueling Innovation – as you know, I have concerns about the early stage ecosystem, particularly in SC. And the last few months have not been kind to those seeking funding (I’m seeing way too much pay to play stuff). If we don’t place lots of bets on early stage opportunities the innovation system just doesn’t work well (its a numbers game and requires a healthy ecosystem).”

The problem is, it’s a fact that the vast majority of these companies will fail. And yet, we can’t have true innovation without taking a step back and funding innovation for innovation’s sake, so it’s a catch 22. But I think the “near bubble” that we may or may not have been headed towards actually got us to where we need to be in terms of building the next generation of advanced technology that will ultimately lead to ventures with mass market appeal and/or revenue models that make sense.

@stowe No IPOS true, but given that acquisition has been driving the startup market, and ultimately, as bigger fish eat smaller fish on up the food chain someone gets left holding that bag, often a public company, which mid-to-long-term over the course of several M&As definitely has an impact. I agree though, it was most likely not going to be a bubble the size of the 1st one, but I still think the impact could have been quite large and resounding if things had continued along the path they were headed down. I guess the fact is that we don’t know, because that’s not the direction things went in, and all of this is speculation.

Likewise, asking VCs about the possibility of a return to tech IPOs is like asking evangelists about heaven: they want to believe.

There is no bubble 2.0 because there were no IPOs: it was an impossibility. So the downturn didn’t fend it off.

The real worry is that lack of capital will choke off innovation, and we’ll have a lost decade, like the Japanese did in the ’90s.

On Web 2.0 S/N – 2008 saw the Signal-to-Noise ratio get way out of control (I’d say it was below 1). I think much of what you point out as overfunding may have been out of fear of missing the NBT and/or missing out on the emerging platforms. In my recent chats with VCs, many are pruning their portfolios and focusing investment in follow on rounds for the best companies. And clearly there is an interest in a business model. Last year was web[me]2.0.

Doom be Damned – it has not been an encouraging time for entrepreneurs. I’ve spent almost all of my last 3 years in startups and the end of last year was a huge bummer for many. But now the conversations are returning to focusing on what CAN be done – in this environment – to build companies that will solve unmet needs in 2010/11. One of the problems with last year was that there was WAY TOO much focus on current problems (loosely defined). The best startups focus on the future, bet big and then figure out how to build to that incrementally (that’s what I’m doing with everything I’m involved in). Buckle up – its going to be a bumpy ride, but a ride I wouldn’t miss.

Fueling Innovation – as you know, I have concerns about the early stage ecosystem, particularly in SC. And the last few months have not been kind to those seeking funding (I’m seeing way too much pay to play stuff). If we don’t place lots of bets on early stage opportunities the innovation system just doesn’t work well (its a numbers game and requires a healthy ecosystem). But, in recent days more news is coming out about new small funds – the wave of the future I hope (and something I hope to participate in). This is VERY encouraging – I think if our innovation system is going to return to greatness, it will be in large part because angels and small funds find ways to continue investing in early stage opportunities so we don’t fall behind. This is one of my great passions so I’ll stop now before I bore the hell out of your readers.

On Saviors – I don’t know if an IPO market will come back anytime soon (I’m betting on M&A led by the agency folks) and I don’t know if it would correct the economy fully. One thing I do know is that the entrepreneurs that survive/thrive over the next few years will be a new generation of amazing leaders. I believe innovation is our only way out of the current mess so we need to figure out ways to get more participation – plain and simple.

Me, my hat is in the ring.

I had a bunch of conversations with people at IAB at the beginning of the week, along the lines of “hmm, in ‘01 it was the tech in the tank, economy slowed but okay; today, it’s economy in the tank (and then some), tech (well, specifically, internet media/advertising) seems to be ’so-far-so-good.’”

We’ll see what happens, but there’s always something that pulls things back up again – would love for it to be tech this time ’round.