Time For A R.I.P Startups Slideshow? Not Yet, Says Dixon Doll

When the financial markets were hemorrhaging in late 2008, Sequoia Capital circulated its now infamous slideshow: “R.I.P Good Times.”

Cut headcount, preserve cash or risk extinction, the sky-is-falling tirade advised startups.

“We’re not there,” says Dixon Doll, co-founder and general partner of DCM, an early stage firm managing more than $2 billion in capital.

Doll’s observation may seem somewhat self-evident today with the markets seemingly more stable after last week’s wild gyrations. But who knows what is in the cards tomorrow or when the Congressional deficit panel reports back to the country.

In an interview on Friday, Doll, with more than 35 years of experience with entrepreneurs and high tech, sounded unflustered. “Stick to your knitting,” he advised startup CEOs. “Go out and make your numbers.”

But he directed more concern toward the IPO market. The number one enemy of venture backed IPOs is volatility, he suggested: “The exit market in general is a fragile ecosystem.”

This could mean the window for new offerings is shut at least temporarily for all but a small number of top companies, he said. And “I think that it’s already affected exit valuations,” he added.

Of course conditions could turn around quickly. When stability returns, there will likely be a wave of IPOs from some of the top 10 or 12 companies waiting to sell shares to the public.

A second wave of still solid companies will likely follow, he added. “I think the market is going to open again.”

On the other hand, corporate M&A will continue at a rapid pace, he said. Corporations have money, and their interest will lessen the downward pressure on private company prices and valuations.

Let’s hope so. It certainly sounds logical to me.