"The business plans we're seeing are again based on business models that make sense," Dettmer says. "They're plans that entail a lot of hard work, but we also know they're tested models that work."
Other corporate attorneys agree. Dennis DeBroeck heads the corporate practice inside Fenwick & West in Palo Alto, Calif. Based on conversations with a handful of associates working inside his group, DeBroeck estimates that during the third week of July at least seven startups approached his firm with concrete offers from VCs. Similarly, Casey McGlynn, a partner at Wilson Sonsini Goodrich & Rosati, has been getting more visits from entrepreneurs. "They've been scared, but now they're increasingly coming with new ideas," McGlynn says.
Other figures within the startup ecosystem are noticing similar trends. Representatives from several public relations outfits, especially those that cater to the startup community - and therefore were hit hard by the dot-com crash - report more newly endowed companies seeking publicity advice. SparkPR founding partner Donna Sokolsky says the firm is getting two or three calls a week from newly hatched and funded firms. That's fewer than the three dozen calls a week during the Internet's peak, but more than the two per month seen earlier this year.
Preliminary data from the second quarter shows an increase in early-stage financing that bodes well for the rest of the year. "A third of the industry is trying to figure out what happened," says Jesse Reyes, VP of research at Venture Economics. "A third is trying to evaluate its current portfolio. And a third has gotten rid of the dead wood and is now actively looking at new deals."
There'll still be plenty of pain through the end of the year, according to Reyes and others, especially for those firms seeking later-stage financing. But, after the usual summer slowdown, Reyes anticipates a slow but steady increase in early-stage deals through the end of the year.
"The perception of the new economy nine months ago was stupidly high," says John Doerr, a veteran VC at Kleiner Perkins Caufield & Byers. "Today it's stupid low. We're moving toward normalcy - I hope."
