There have been a lot of great posts this week about what the financial crisis means for startups.  There was Jason Calacanis’s epic Startup Depression and Fred’s thoughts on it, Brad Feld’s Focus on Things Under Your Control and Roger Ehrenberg’s somewhat dissenting view that there is a new group of angels that might not pull back.  I attended several conferences and panels this week and was asked the question about how this influences startups and startup investors at everyone of them.

If you have not read all the posts or want a quick summary, here are some highlights

• Angels are likely to get more cautious and slow down their pace and the size of checks they are willing to write (this will reduce the amount of angel investing, but maybe not as much as in previous times are there are now more deep pocketed angels).

• VCs also tend to slow down their pace of making new investments in anticipation that they will need to invest more money over a longer period of time into their existing portfolio companies.
  

• Consumers and enterprises are cutting back on discretionary spending which makes it harder for startups to gain revenue traction. Almost by definition, if you are a startup, you are offering something *new* and the decision by a consumer or enterprise to spend on that initially comes out of a discretionary budget.  The exception are startups that offer a cost-saving alternative to something that already exists (and even then the cos-saving has to be significant and proven).
  

• As a startup the thing you control more than anything is your burn.  Keep it as low as possible.

I should add, that *if* you can stomach it and stick it out, now is the best time to get started (or to make every effort to hang in there).  Great folks are looking for interesting things to do, have reasonable salary expectations and stock options that are going nowhere.  Fewer competitors (if any) will get funded.  You can spend time to actually build the right product instead of rushing in landgrab mode.  Finally, when things turn around you are there to own the market while others are just getting going.  Sort of like starting to ski while the snow storm is still blowing instead of waiting for the sun to come out.  Guess who gets all the fresh powder.