Julie Rosien

Venture capitalists are paid big bucks to see around corners and figure out what is coming next. So, what are they predicting for 2009.? Yesterday, we heard from four Seattle area venture capitalists who shared their thoughts on everything from an Amazon.com purchase of eBay to the continued erosion of Google's stock.

Today, we're hearing the predictions of five others: Bill McAleer of Voyager Capital; Matt McIlwain of Madrona Venture Group; Robert Nelsen of Arch Venture Partners; Brad Silverberg of Ignition Partners; and Steven Hnatiuk of Yaletown Venture Partners. (Our lone Canadian)

So, without further ado, here's part two of the VC predictions. How do you think they will do?

Bill McAleer, Voyager Capital:

Number of IPOs in Washington state in 2009: Zero.

Number of new investments your firm plans to make in 2009: Four to five.

Google's stock close at the end of 2009: (Now at $325): $365

Microsoft's stock close at the end of 2009: (Now at $20.12): $23.50

Nasdaq final close on 12/31/09: (Now at 1617): 1750

Will Microsoft acquire Yahoo: No

What other tech acquisition(s) will occur in 2009: Yahoo, Sun and/or Nortel will be acquired.

Where will your firm spend its time in 2009: "We think it's a good time to invest and will be looking for investment opportunities in following areas: Digital media infrastructure, digital consumer opportunities, cloud computing applications, SAS applications targeted at specific vertical markets, Green IT and healthcare applications. With our portfolio companies, we'll have a single minded focus on execution and hitting key milestones. "

What company is best positioned to take advantage of the downturn, grab market share and grow: Cisco, Amazon and Walmart.

Advice to startups for 2009: "It's a good time to start a company if you have a very unique idea that resonates with customers (saves them time, money or is very compelling in a tight economy) . Stay very focused, keep spending behind revenue, hire the very best athletes for every position and weed out marginal performers on your teams."

Other bold predictions for 2009 in tech, politics, sports or anything else: "The decision will finally be made to replace the 99 viaduct with a tunnel; The Husky football team will win at least two games in the 2009 season; Seattle will have one major daily newspaper by the end of the year."

 Matt McIlwain, Madrona Venture Group:

Number of IPOs in Washington state in 2009: Two

Number of new investments your firm plans to make in 2009: Six

Google's stock close at the end of 2009: $450

Microsoft's stock close: $23

Nasdaq final close on 12/31/09: 1,900

Will Microsoft acquire Yahoo: "Not all of it, possibly some of it. Disney should buy the non-search business and sell the search business to Microsoft."

What other tech acquisition(s) will occur in 2009: "There will be many more "stock swap" deals rather than "Company A buys Company B for cash and/or stock". The reason is that many technology stocks are down relative to historic trading multiples (earnings, revenue and cash multiples) and the logic that is likely to prevail is that "stock for stock allows us to factor-out the current depressed equity pricing....and hopefully enjoy the future upside together." To be more specific, I could see mid-size public companies like Citrix, F5 and Network Appliance being bought by very large companies this year and a number of small cap public companies merging in "stock swaps" per the above. One bold prediction is that eBay gets acquired by Amazon!"

Where will your firm spend its time in 2009: Technology-differentiated companies for the online advertising ecosystem; cloud computing-related sectors; opportunities driven by parallel processing; SaaS applications that improve specific workflows/business processes and in general helping our existing portfolio continue to grow.

What company is best positioned to take advantage of the downturn, grab market share and grow: "Apptio - they provide Cost Optimization Services to Enterprise IT on a SaaS basis...pretty strong fit for these times."

Advice to startups: "Maintain a 'conservative bias' throughout the year (don't get fooled by early signs of a recovery...nothing sustainable is going to happen in the first 6 months), but look for opportunities to strengthen your team, clarify your value proposition with your customers and gain market leadership in emerging sectors."

Other bold predictions for 2009 in tech, politics, sports or anything else: "Mariners have a winning season! Obama's favorability rating falls below 50 percent at some point by year-end (according to USAToday/Gallup Poll or another nationally recognized regular poll)."

Robert Nelsen, Arch Venture Partners:

Number of IPOs in Washington state in 2009: Zero

Number of new investments your firm plans to make in 2009: Six new companies. (Not including follow on investments, which is around 20.)

Google's stock close at the end of 2009:  $375

Microsoft's stock close at the end of 2009:  $23

Nasdaq final close on 12/31/09: 1921

Will Microsoft acquire Yahoo: No

What other tech acquisition(s) will occur: Amgen gets bought by Pfizer

Where will your firm spend its time in 2009: Actively investing in biofuels, biotech, advanced materials (solar, lighting, water)

What company is best positioned to take advantage of the downturn, grab market share and grow: "Anyone with lots of cashflow. In our portfolio, Ikaria."

Advice to startups: "Conserve cash, invest in projects you can partner with non-equity dollars, make sure your syndicate can go two to four years with no outside money."

Other bold predictions: "Oil prices will rebound in late 09 to 70 dollars. India will attack Pakistan."

Brad Silverberg, Ignition Partners:

Number of IPOs in Washington state in 2009: One.  "I was tempted to say zero but as an early stage investor, I am always an optimist."

Number of new investments your firm plans to make in 2009: "Six, plus or minus. We remain active investors. "

Google's stock close at the end of 2009: I think Google will lag the Nasdaq.

Microsoft's stock close at the end of 2009: "I think Microsoft will exceed the Nasdaq, as I believe Microsoft will gain some search share this year and Windows 7 will come out before the holidays, be well received, and the stock will get a bump."

Nasdaq final close on 12/31/09: 1,800

Will Microsoft acquire Yahoo: "No. I think Microsoft will acquire the search business but not all of Yahoo. "

What other tech acquisition(s) will occur in 2009: "Hopefully some of our companies! In a recession, the big companies, such as Microsoft, Cisco, Oracle, HP, etc., take advantage of their strength and make acquisitions at favorable prices. There's little margin for error in this economy, so you'll see a lot of smaller companies either get gobbled up or fade away. "

Where will your firm spend its time in 2009: "We're very bullish on areas like virtualization and cloud computing, and we'll continue to make new investments there, as well as telecom, mobile, and consumer Internet.. We're certainly spending a lot of time on existing investments, but also view slowdowns as a great time to make new investments, both for brand new companies as well as series B. We've also made a couple investments in the consumer healthcare and education areas, and, especially with the new administration, we think those are well positioned. We'll be working with all our companies to focus their efforts and help them run lean."

What company is best positioned to take advantage of the downturn, grab market share and grow: "My first reaction is a company like Cisco, which can use its size and ambition to get especially aggressive now. For smaller companies selling to businesses, the key is to enable your customers to reduce costs in a big way and do it now -- quick ROI. I will shamelessly mention of few of our companies that are doing well with that, namely, Splunk, Azaleos, and Skytap. "

Advice to startups: "It's a very challenging environment and startups will have to be ever more so nimble, clever, and insightful, and watch every dollar like it's their last. But it's also a time when the best companies can really separate from the pack. If you're hungry, smart, work harder than anyone else, and come up with a product or service that really hits the mark, you can be a big winner. You have to be a "must have" not a "nice to have" -- a compelling proposition, not an "interesting" one."

Other bold predictions for 2009 in tech, politics, sports or anything else: "2009 is going to be a volatile year, so expect the unexpected. I personally am hopeful about the new administration -- it has a very tough task ahead of itself both domestically and internationally."

Steven Hnatiuk, Yaletown Venture Partners:

Number of IPOs in Washington state in 2009: Zero

Number of new investments your firm plans to make in 2009: Up to four

Google's stock close: $353

Microsoft's stock close: $25.50

Nasdaq final close on 12/31/09: 1795

Will Microsoft acquire Yahoo: "Yes. Or be taken private with Microsoft playing a role in the financing. "

What other tech acquisition(s) will occur in 2009: "Hopefully some."

Where will your firm spend its time in 2009: Continuing to invest the most promising IT companies in British Columbia & the most promising cleantech companies throughout Western Canada and the Pacific Northwest.

What company is best positioned to take advantage of the downturn, grab market share and grow: Amazon

Advice to startups for 2009: "Stretch your cash."

Other bold predictions for 2009 in tech, politics, sports or anything else: "Return of BC's pro-business provincial government with another strong majority in spring of 2009. Yet another Canadian federal election will be called (not that anyone south of the 49th pays attention to Canadian politics)."