Madrona holds closed-door meeting on economic crisis with startups

Top executives from AdReady, Redfin and other Madrona Venture Group portfolio companies gathered at the Seattle venture capital firm's downtown office Tuesday to discuss potential strategies for survival amid what could become a lingering economic crisis.

"We talked about the challenges, but also the opportunity," said Madrona's Greg Gottesman, adding that executives from every portfolio company attended.

Gottesman didn't share specific details about what was said in the confidential meeting or who spoke, though he did note that business leaders from the dot com bust shared stories of how they made it through the lean times earlier this decade. All of the Madrona partners spoke as did many of the CEOs in what was described by those who attended as an open and positive discussion.

The session included a slide presentation. However, Gottesman noted that electronic copies were not distributed in order to avoid the situation that Sequoia Capital encountered earlier this month. The Silicon Valley venture capital powerhouse found itself in the limelight after slides from a presentation dubbed "RIP: Good Times" leaked into the blogosphere. That presentation painted a very grim picture of the economic troubles ahead, serving as an abrupt wake up call to the venture industry.

It doesn't appear as if anything as nearly apocalyptic was distributed or discussed at the Madrona meeting.

Anupam Gupta, the chief executive of online video advertising startup Mixpo, said he appreciated having a discussion with venture capitalists and entrepreneurs about the economy and strategies for success. He described the overall mood of the meeting as "pretty pragmatic."

After the get-together, the Seattle entrepreneur said he was feeling "pretty optimistic, obviously in a cautious way." 

Another CEO, who asked not to be identified, said "there was nothing dire at all about the meeting." No specific directive was provided to reduce costs or headcount at the startups, he said.

Still, the recent meetings at firms like Madrona and Sequoia highlight the changing climate in the venture and startup communities. Less than a year ago, companies such as Facebook, LinkedIn and Zillow.com were commanding lofty valuations. 

"CEOs by nature are an optimistic bunch," said Gottesman. "My sense is everyone is feeling aware of the challenges. You can't help but be aware."

But the Seattle venture capitalist said it was important to stress that even in bad times, opportunities can arise. He noted that companies that play their cards right during down periods can emerge as substantial businesses.