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Check Your VC's Pulse

Ask your VC three questions to gauge its level of involvement.

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This story appears in the March 2009 issue of Entrepreneur. Subscribe »

With the U.S. economy bouncing around chaotically, VC-backed companies are in a unique position: Until they become cash-flow positive, they're dependent on the support of their investors for additional financing.

I recently heard some remarkable rumors and innuendos about how software and internet investing was finished as the VC firms stopped investing. I expect these assertions were triggered by the now infamous "RIP: Good Times" presentation from Sequoia Capital in October. A number of people I've talked to concluded that a bunch of VC firms were going to simply go out of business.

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