Venture capital funding in Southern California falls off a cliff

Tony Katz had big hopes for his Porter Ranch company, Aweli, when he first started looking for venture funding in late 2007. He was sure its method of monetizing online videos would appeal to investors.

Twelve months later, he's kind of given up.

"There's no math that we can do that in this economy that shows it making sense to go after venture money," he said. Instead, he's trying to run the company on existing cash. "As we see it, if you can’t run a company on the dollars that you have, you don’t  have a company. Those days are over."

They're over for many companies seeking venture cash. Nationally, the amount of money invested in the fourth quarter of 2008 dropped 30% to $5.5 billion from the previous quarter, according to just-released numbers from Dow Jones VentureSource. In Southern California, the amount of money invested fell 45%. The number of deals nationwide fell 23%

For more depressing figures on the sorry venture climate, check out this story.

-- Alana Semuels

Photo credit: sdpitbull via Flickr

Comments

[scott]

Totally agree. And this is coming from a VC himself.

You may want to check out the upcoming event in Southern California with Adeo Ressi. A venture capital conference that asks, "How can we get more capital into the hands of entrepreneurs?"

http://innovation2009.eventbrite.com

[Tony Katz]

Ms Semuels - that's no way to write an opening line, especially when it gives such a bleak outlook for the future - and one that I do not share.

Aweli is strong, and offers some of the best video monetization options in the market today. AdGrinder, our ad creation toolset, is a first of its kind self-service ad agency. The changes we made came about because of the economy, as we saw an opportunity to solve a huge problem for content creator: How can content creators earn and keep more ad revenue?

The idea that we have somehow abandoned all hope is just wrong. We have reacted very well to the economy, streamlined our needs, and are now leading the way in ad creation...with the highest rate of adoption coming from traditional print outlets. This doesnt' even address the exceptional interest we're getting with our Dynamic Product Placement tools and patent-pending metrics package.

I encourage everyone to visit us at , and see for themselves how we are empowering content creators in this economy. Aweli is here to stay - economy be damned!