Mark Suster: Raise Money Now So When The Party's Over You're Sitting Pretty

[vimeo http://vimeo.com/25219791 w=620]

Earlier this week GRP Parter VC and VC blogger Mark Suster gave the keynote talk at the Founder Institute’s Founder’s Showcase on “Getting Funded In A Frothy Market.” Suster began the keynote with the declarative statement that we’re in a bubble, “We’re in a bubble, you can quote me on that and I generally haven’t been saying that publicly,” he affirmed.

Suster went on to refer to the uniqueness of this particular period of exuberance, in that it’s localized, “If you’re in Cleveland, Ohio you don’t particularly feel like there’s a bubble,” but right now the usual 3-5 months it takes to raise capital have been distilled down to 3-5 days for startups in Silicon Valley, New York and L.A.

Suster urges these startups to raise money now, so they can survive when the bubble inevitably pops, “When the party’s over the party’s over” he went on, urging entrepreneurs to start raising… “when the Hors d’œuvre tray is passed around take two, and put a third in your pocket,” likening the market froth to a hopping party where everybody is drunk, off of their own Kool Aid in many cases.

Having lived through three previous cycles, Suster knows how the party will end (with a hangover for most), and relays his key takeaway which basically amounts to stocking up on supplies for the winter — So you can live to tell the tale:

“Go get yourself funded, in whatever way shape or form you have to, at whatever price you feel comfortable with, with people you trust like and respect in whatever amount and go build a company. Really in the end it’s kind of a binary outcome; You raise money and give it your all, you give it your college best and sometimes you succeed and sometimes you don’t.

It’s a wonderful experience to go through. I just remember in the last three cycles the companies that didn’t raise money are the ones that weren’t around to tell that story.

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And I know how this ends, this is my crystal ball; When the party ends everyone goes home and you can’t hire people, you can’t raise money, the Wall Street Journal isn’t writing articles about you any more, no one returns your phone calls. Honestly that’s the most rewarding time to be a startup entrepreneur, provided you have money.”

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