"Then Louie expounded on the reasons why it’s a great time to start a company.
1. “The companies that build value can survive the dark days. Your rivals will evaporate in a tough economy.”
2. VCs will often take your idea and give it to another entrepreneur if they can’t do a deal with you. This results in a lot of copycat companies. But that won’t happen in a down economy as often because the VCs can’t afford to start as many me-too companies.
3. “Building a startup is not affected by current economic times. You’re going to launch but not for 24 months at the earliest. You can launch your product as the economy is recovering.”
4. It’s a great time to steal talent. “If those Sequoia-backed companies are laying off people, they can work over at ours.”
5. “You have to have the confidence to know you are great.” He noted that his partner, Stewart Alsop, often asks trick questions of entrepreneurs, such as, “What happens if you don’t get funded?” If the entrepreneur says they will do another idea, that’s the wrong answer. The VC wants to know if you will do it anyway because you’re passionate about the idea, rain or shine.
Louie noted that he is not looking for ideas with high probabilities of success because they’re probably obvious ideas that others will copy. He laughed at how the founders of Federal Express were so down on their luck that they went to Las Vegas to gamble and raise money to meet payroll.
He said that venture capital is an expensive form of capital and that you should raise it only if you really need it.
“Don’t raise VC money to show your friends that you can do it,” he said. “For those who get money, the most important thing is to spend time with VCs to get their experience and wisdom. They can recognize patterns of stupidity and patterns of genius.”
Lastly, Louie said, “Don’t be afraid. This is the time to choose your dreams.”"