Today, conversely, I know lots of people like me, refugees from big tech and big media with knowledge and cash or micro-cap funds (>$25 million) that are not only still in the game, but operating with much the same attitude as the smaller VCs discussed above. What this means for the entrepreneur is that it will surely be harder to put together those "friends and family" rounds, as the dad next door who was willing to toss in $50k in April is licking his wounds from his equity portfolio dropping by 30%. But while the competitive environment for capital has intensified the money is there, it just happens to be in fewer, more concentrated hands. And I'm not sure this capital was even available in the wake of the early 2000s downturn. So that is the good news.

Entrepreneurs: Be relevant, be focused, be a cash hog

David and Matt had some priceless lines last night that I will seek to recall, gems for the entrepreneur who is wondering how to best position their business both to the market and the investment community:

D. Kidder: Be in the jet stream; don't be at the edge. Get in the middle of "directional optimism."

What David was saying is to avoid being a feature, an add-on. Be right in the middle, be relevant. Be something that squarely addresses a client problem. Don't be afraid to go for it. Because if you don't, you will not succeed.

D. Kidder: Get your product into customers hands ASAP - NO SCIENCE PROJECTS - and with total transparency.

In essence, don't be afraid to look stupid, don't be afraid if it breaks. Be honest with a client as to where you are and what you are trying to accomplish. Take their feedback seriously. Rapidly iterate on the product. And get it back out in front of them. Use rapid iteration to FIND THAT CUSTOMER.

M. Blumberg: Overcommunicate with your team in times of turmoil. Whether the company is big or small, it doesn't matter. The leader needs to be a calming influence - and helps keep good employees in their seats.

Matt shared some stories of entrepreneurs he knows that did both very good and very bad jobs of communicating with their teams when times were tough. Those that did share a lot often found that team members came up with solutions better than the CEO, and were "pre-socialized," helping to allay a CEOs fear of having to fire people, cut salaries, etc.

D. Kidder: Listen to customers and data. They are the two keys.

While David acknowledged the value of his Board and other smart people in his orbit, at the end of the day the ultimate guideposts of progress are customer feedback and data around usage. Little else matters.

D. Kidder: Be and "AND" culture

In short, always be raising money until you never have to raise it again, and build product at the same time. Those who say raising money is a distraction to building product just don't get it. You have to do both AND do them well. It's all about the AND. 

The Key Take-aways

• Cash for start-ups is out there, but principally from the smaller VCs and super angels

• Fewer players actively doing early stage means greater competition for cash, so plans have to be sharp, relevant and highly cash efficient

• Cash is king, but you've got to spend cash to be king someday

• While the VC and economic weather is stormy and is likely to be so for quite some time, businesses are still being created, innovation is alive and well and businesses are getting funded. It is just that everybody is having a harder time. That's all.