Fred Wilson has a great post up about macro trends and their impact on VC and startups. The paragraph that jumped out at me was the following:

And I don’t think the startup economy and venture capital is immune to this new reality.

So what should we do about it? Well first, we need to be careful with valuations. If financial assets are going to be subject to downward pressure then inflated valuations will not be sustainable. We need to be careful with the amount of money we invest and burn. Companies that are capital efficient and cash flow positive will fare better in this environment. And we need to be prepared to wait a long time for liquidity.

In my mind, the critical challenge facing anyone starting a company is how to get it to be self-sustaining as quickly as possible while using as little capital as possible along the way. Balancing growth with capital conservation is a great example of the line that needs to be walked between goals that can seem to be in opposition to each other. I’ll write more about this particular issue in another post because it comes up again and again. In the meanwhile, good luck with your respective businesses.