Startups in Silicon Valley Tighten Belts

Many girding themselves against possible recession
By Laila Weir,  Newser User
Posted Feb 15, 2008 10:16 AM CST

(Newser) – Companies in Silicon Valley are slowing spending and stockpiling funds to prepare for a possible recession, with many startups raising safety-net cash from investors. Venture capitalists, who raised more funds last year than any year since 2001, continue investing, reports the Wall Street Journal, despite a recent survey that found their confidence in the region at a four-year low.

Concerns include corporations cutting their tech budgets, reducing the market for the Valley’s wares, and spending less on the Internet ads that are many online businesses’ bread and butter. So far, most startups have avoided sales drops or layoffs, though some sectors—like real estate companies and those that sell to the financial-services industry—are suffering more than others.