This seems like a no-brainer to me. The laws of supply and demand would suggest that a more favorable deal can be had for a better idea / business model during bad economic times. Buyers get a better price when demand is low.

Slightly off topic, the volume of such deals is where the problem truly lies..and where perception gets messy. And public statements about now being a good time to invest appear silly... albeit true.

I don't see that you have any crow to eat at all. Not yet anyway. I did not see that you disputed what they said about valuations. One still has to know how to pick the winners.

I go through the same thing in Real Estate. Whenever there is a downturn people come to me thinking they are going to double their money by buying in a downturn. That's not true for all properties and not true for all downturns. Most people cannot afford the properties that are going to double in value.

Scott's quick view of the stats not only showed the returns due to better valuations but also a higher percentage of deals doing well. That's percentage, not numbers. Did he look at the firms? Couldn't it be that the percentage is exactly the same for the firms in question, and that the poorer performing firms are not part of the statistics in a downturn? Eliminating the bad performers (VCs) in a downturn would explain why the overall statistics look better.

Scott said that it could be attributed to bad ideas leaving the market and only good ideas are left to invest in. That is not a comforting thought as it doesn't show any intelligence on the part of the investor, just luck. I say it could also be that bad investors have left the market as well, and not just bad ideas. The fact that people have to hype that now is the time to invest shows the need to stop investors from leaving the market.

I agree with Scott that the stats need to be looked at more deeply. So I say the jury is still out. Another way to look at the stats is for an individual investor to look at their own past portfolio and change the valuations to the type of valuations they would get today, and see what impact that has on their bottom line.

This question can be posed to other investors and money managers, if they change the valuations of past investments to what a current valuation might be, how much better would their portfolio look? But don't forget to also consider the reduced market size for the opportunity's products if that is the case.

I noticed that Alltop is one of your sponsors. Their ad reads "proof that we kick ass". I was curious to see Mr. Kawasaki's definition of proof so I clicked on the ad. No proof was offered.

I got over 60 links to what were supposed to be "all the top" venture capital news and information. Many of the links have nothing to do with venture capital. This is contrary to what Alltop advertises.

Alltop advertises that they give you only few links and only the best. But with broad categories that is impossible. They need librarians on staff in order to live up to their advertising.

They are trying to do the job of newspaper and magazine publishers; figuring out what readers want so they can sell advertising, except Alltop doesn't want to pay for the creation of the content.

Not only does Mr. Kawasaki not give us any proof, he doesn't tell us his definition of kicking ass. According to the ranking of his website, he probably is not referring to that.

Frank - thanks so much for doing this show. I've wondered exactly the same thing and while it may not be exact, at least it passes the first sniff test.

Doubt that means we'll see a flood of early stage investment.

Thanks Frank - keep up the good work.