Over the past several years I've had the opportunity to work with several emerging and nascent technology companies.  Some which are have made it and others who haven't.

When I worked for a large investment firm, I reviewed, tested, and provided market information for a number of technologies and evaluated their usefulness within our IT portfolio.  As part of the same organization, I would assist in the due-diligence work that our Venture Capital (VC) group did before investing in a technology company. This continued into my more recent work at a small investment boutique, an emerging technology sales outsourcing firm, and as a consultant for a venture capital firm.

Good technology was only part of the equation of a successful firm.  Several companies that I've worked with over the years had great technology or vision, but failed in marketing. They might have been targeting the right product for the wrong audience. Companies had were caught overpromissing were doomed to fail as it just kills any reputation executives have.  Another failure was management.  Upper management's failure to grasp the problem their product was trying to solve or their inability to executive on a vision. disrupted companies that adopted their products early in its development.  Retooling is fine, but doing it every 3 months?

Anyway, the point of all this is that most of this occured in relative "good times" for venture-backed companies.  Now with the uncertain economy and as investment portfolios have to re-adjust because of covenants in their charter, less money is being invested in direct ventures and funds-of-funds.  In turn, VC  firms have the tendancy to double-down within their existing portfolio rather than looking for new places to park their clients' cash.

There is a silver lining. There are many firms today that did their signifcant tooling during down markets.  Google, for example, was barely out of the gate before the dotcom bubble. Companies have an opportunity to really focus on their work and development without the exuberance when they were flush with cash.

IT Managers also have an opportunity. By selecting companies that lower their risk or improve their bottom line, they will provide a service to these new companies and probably get them at them a low cost.

As companies gain some paying customers (albeit small payments), they are more likely to receiving funding either from VCs or angels.

Although the outlook for 2009 is uncertain, opportunities exist for companies that seize it; whether they are making the technology or using it.