Craig Sherman didn't mince words today when asked at Entrepreneur University about the current climate for venture and angel investing.

"Things suck," said Sherman.

Just how bad is it? The partner at Wilson Sonsini Goodrich & Rosati said he is working on two deals right now where the companies previously commanded a post-money valuation of $10 million to $15 million. Now, investors want to value the companies at $500,000 to $1 million. (Talk about a down round.)

"Terms are horrific," said Sherman, advising attendees not to raise money unless they have to.

Geoff Entress, an angel investor who sat on the panel with Sherman, wasn't that blunt. But, he too, said things are rough.

"It has slowed down a lot," said Entress. "Things are bad out there.  "I've heard from other angels that they're not writing any checks."

In an interview after the talk, Sherman noted that entrepreneurs are facing difficult decisions about whether to accept venture funding. Many companies have few choices at the moment.

"They are asking, 'do I shut down the company or take the money on bad terms," said Sherman. He was not aware of any situations where a venture firm revoked a term sheet and instituted a new, lower valuation.

Sherman and Entress offered a few other tips to entrepreneurs.  

Don't get drunk and hand over 25 percent of your company to a buddy on the back of cocktail napkin, advised Sherman. He said there has been litigation over issues like that.

He also advised entrepreneurs to register their companies in Delaware, adding that Olympia is in the 19th century when it comes to processing documents. 

"You can do a Washington corporation if you really want to, but please don't," said Sherman, adding that investors from outside the state will probably request that the company register in Delaware anyway.

Entress and Sherman disagreed on the topic of bridge loans for startups. Sherman likes them, Entress tries to avoid them because the valuation could get reset once a larger venture capital firm gets involved.

"I don't believe they adequately compensate you for the risk you're taking," said Entress.

Sherman half-jokingly countered that angel investors "may get screwed by the VCs anyway."