There’s a place on the Internet where you can arrange for an hour-long massage, a ride to the airport, and a tour of the haunted parts of Seattle, all without spending a dollar.

Dibspace, a relatively new Seattle startup, makes this possible by creating its own currency, the “dibit,” by which people can barter goods and services, either by direct trading or in exchange for dibits—which can then be used to purchase something else offered on the site. In a recession, when cash is scarce, barter and barter currency makes a lot of sense.

Chief executive Dominic Canterbury started work on Dibspace a year ago with the idea that small businesses have a lot of productivity they are unable to use up. After running his own marketing agency for four years, Canterbury decided to make a place where that extra capacity could be advertised and bartered for in exchange for other services. Although originally designed to help small businesses, many of Dibspace’s users now are individuals with services or goods to offer.

“Dibspace makes it easier to trade since money is in short supply,” Canterbury says. Each dibit is worth the equivalent of a dollar, so people used to thinking in those terms adjust easily, when a straight trade occurs; dibits are the currency used to even out any disparity in value. This economy within an economy was launched about four months ago and already has more than two thousand users. Currently, the value of all the offers on Dibspace is about $110,000, and the equivalent of about $55,000 has been traded since the site launched. Canterbury says that massage, yard work, and Web design are among the most popular offers.

The site is free and without advertising, but “Dibspace is revenue driven,” Canterbury says. “We have at least four plans to generate money,” he adds, although he cannot reveal those plans yet due to non-disclosure agreements. Currently, the startup is supported by undisclosed investors.

Even as the mini-economy develops, Canterbury and the two other members of his management team remain in ultimate control of it. People have to identify themselves to the site’s owners before …Next Page »

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I had the pleasure of attending the 2009 WTIA Tech Showcase Fast Pitch Forum yesterday. I was one of four panelists tasked with listening, reacting, and asking questions of the 23 Seattle-area companies that each had eight minutes to present. The day was divided up into six one-hour-long sessions, and I’m ashamed to admit I missed the last two sessions because I had some other meetings in Bellevue that I had to attend. However, after listening to 16 companies spread over four sessions, my brain was overflowing with new info and thoughts, so I’m not sure how much value I would have added during the final two sessions.

In a nutshell, I was very impressed by both the content and the form of the presentations. The presenters did a great job of condensing their pitch into exactly eight minutes. What also struck me was that despite the slow economic times, most of the companies were doing well in the marketplace. All of them had growing customer bases and rising revenue, and many of them were hiring.

It is a hackneyed phrase, but it is true—economic downturns are often the best times to build a startup company. In the chaos and confusion of turbulent times, there always lies opportunity. As industries change and contract, the marketplace is ripe for new solutions. Because despite the negative headlines in the media, people are still going about their daily activities and living their lives, and there will always be opportunities for new products and services, and for new technologies that reduce the cost and increase the efficiency of existing products and services.

Two examples in Seattle are Redfin and TeachStreet. Redfin is an online real estate brokerage. As we all know, the real estate industry nationwide is in a major slowdown. However, Redfin continues to experience strong growth, partly because I suspect that during tough times, people enjoy using technology to make their real estate deals a higher quality experience, not to mention a more efficient and cost-effective transaction.

TeachStreet was also interesting. They have built an online marketplace where people who want to learn can connect with the best teachers and classrooms; and where teachers and tutors can find students and clients. They also are growing nicely. During slow economic times, many folks want to learn new skills (either for professional or personal reasons), and many experts have more time on their hands to provide teaching services.

That being said, I’m sure everyone in the room today would rather the economy was growing at a 3 percent rate as it did from 2002-2007, as opposed to shrinking dramatically as it is this year. However, many of the 23 startups that presented yesterday will emerge from this recession in strong shape and will be well-positioned when the economy starts growing again. I was an active VC investor before, during, and after the dot-com crash of 2000 and the telecom meltdown of 2001. Many of today’s most successful startups were founded during those dark days, and as Tim Draper noted during his lunch speech, many of today’s biggest companies were founded in prior recessions.

So hope springs eternal, and I won’t apologize for finding silver linings in the current clouds.

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One of the great pleasures of being a journalist is listening to influential leaders discuss where they come from and how it affects their strategy. Luke and I recently sat down with Tom Alberg, co-founder and managing director of Seattle-based Madrona Venture Group. In addition to sharing his thoughts on the future of newspapers and online media, Alberg spoke extensively about his career and how he has witnessed, and participated in, the rise of the technology industry in Seattle.

Let’s take a big step back here. At Xconomy, we’re about delivering the most important breaking news and in-depth analysis of tech and life sciences innovation. But it’s hard to fully appreciate all the latest trends unless you understand the perspectives of the top players. In our interview, Alberg touched on the early days of his career as a lawyer at Perkins Coie in the late ’60s, his later stints as president of LIN Broadcasting and executive vice president of McCaw Cellular, and the birth of Madrona in the mid ’90s. Along the way, he built notable relationships with leaders in wireless, medical devices, and e-commerce—people like Craig McCaw, Jeff Bezos, and Gordon Kuenster of ATL (and more recently, Asemblon).

Maybe you know all the history already, maybe you don’t. Certainly the story of Madrona’s involvement with Amazon has been told many times. But I bet the broader story of Alberg’s career and his observations from the local scene will give people a deeper understanding of Seattle-area innovation and Madrona’s role in the business community.

Here is an edited account of our conversation:

Xconomy: So tell us about your early days in Seattle.

Tom Alberg: My career has paralleled, a little bit, the growth of the technology industry. I started off as a young lawyer in 1967. In those days, there were a few high-tech companies. There was Fluke Manufacturing, and Physio-Control was about to start. There wasn’t much. Seattle had Boeing, and it would go through phases of being less about airplanes, more about computer services and other things. But there were little companies, and there was starting to be more entrepreneurship. When I joined Perkins, I’d been in New York a couple of years, so I was an expert, I thought, in securities law and raising money. But I’d been dealing with hundreds-of-millions-of-dollar deals, not startups. For some reason, I always had a technology interest.

One of the early things that happened was a guy came in named Gordon Kuenster. He’d been a Boeing executive and had been hired to run this startup called ATL [Advanced Technology Laboratories], an ultrasound company out of the University of Washington. He comes into Perkins because Perkins handles The Boeing Company. I’m the low man on the totem pole, so the partner in charge of Boeing has me come and meet with this guy. The partner said, ‘I don’t know, we don’t really do startups.’ I had to plead, ‘Let’s try it!’

X: How did ATL play a role in the rise of the Seattle tech scene?

TA: ATL became a major success at the same time as Physio-Control. Physio went public, and ATL got bought by Squibb for $60 million—big money in those days [1979]. And then what happened was, Hunter Simpson at Physio-Control and Gordon Kuenster at ATL, they invested in some other companies. People who made money in those companies invested in some companies. And then the biotech thing started. I represented Immunex when it first started [in 1981]. It went public, the stock crashed, it survived all those years somehow. So on the biotech side, a bunch of stuff started happening. There was quite a bit of activity, but nothing like it is today.

And then, of course, there was Microsoft. So in 1990, I was still at Perkins. It was a good technology practice. I went over to McCaw Cellular, partly because I was interested in technology. McCaw was sort of a secret company in Seattle. It was in the cell phone business; nobody had cell phones. There was that phone in some people’s cars, sort of like a radio phone or something. Nobody knew much …Next Page »

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Connie Bourassa-Shaw has been the director of the University of Washington’s Center for Innovation and Entrepreneurship (CIE) in the Foster School of Business for just three years. But her ties to the UW go back to 1987, when she was a writer for the UW economic and business magazine, Pacific Northwest Executive. She has played various roles in the UW business scene since then, including director of communications at the business school and executive director of the Program for Innovation and Entrepreneurship—a program for business school students only that Bourassa-Shaw later developed into the CIE, which serves students from all disciplines.

After a brief stint away from the university as the executive director of the Northwest Entrepreneur Network, Bourassa-Shaw returned in 2006 to head the CIE. I called her up to find out more about her thoughts on UW’s take on business, how her center helps academics find their way in the commercial world, and what it takes to be a successful entrepreneur. Despite the dismal economy, which has impacted the CIE directly (she has had to put plans for new programs on hold due to budget constraints), Bourassa-Shaw remains optimistic that Seattle will continue to grow as a hub for startups.

The following is an edited version of our conversation.

Xconomy: What is the role of the CIE at UW?

Connie Bourassa-Shaw: We do all entrepreneurship, all the time. We are really trying to instill entrepreneurship into the fabric of the University of Washington, so that any student, any faculty member, any staff member who is interested in entrepreneurship can take classes, participate in activities, find the resources they need to do a startup, which include broad accessibility to the entrepreneurial community. We have very strong inroads into the community at large, both the venture capital and angel side, the equity side, and entrepreneur side. Serial entrepreneurs who understand the process from one end to the other can be a resource in terms of being a mentor or a coach.

We provide a special program for faculty, who are different from students doing our entrepreneurship curriculum. I work closely with TechTransfer, because that’s where any faculty or student has to go if they are working on something with commercial potential.

X: What are the student programs, and where do they fit into the Seattle innovation scene?

CB-S: We provide a curriculum for students. We have about 700 MBAs, and 88 percent of those take at least one class in entrepreneurship. I get asked the question a lot, how can you teach someone to be an entrepreneur? My sense is that you can’t turn anyone into an entrepreneur. But there is a type of person who is destined to be an entrepreneur. I usually say it’s a genetic defect. For those people …Next Page »

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In the past couple of weeks, we’ve seen further bloodletting in terms of area tech-company layoffs and closures. It really is brutal out there. Here is a quick recap:

—Exide Technologies (NASDAQ: XIDE), a maker of batteries and energy storage devices in Alpharetta, GA, closed its facility in Sumner, WA, and laid off 43 workers earlier this week. The staff cuts were effective immediately.

—Bellevue, WA-based travel site Expedia (NASDAQ: EXPE) laid off an undisclosed number of workers about two weeks ago. The latest staff cuts came on the heels of another layoff (numbers also not disclosed) at the company in February.

—Seattle-based Impinj, the maker of novel radio frequency identification technologies, laid off 23 workers (or about 18 percent of its staff of 130) two weeks ago. Xconomy profiled the company’s strategy in February.

—Sun Microsystems (NASDAQ: JAVA), the software and networking giant, laid off 24 employees in Bellevue, WA, earlier this week. The staff cuts are effective May 30.

—Microsoft (NASDAQ: MSFT) is laying off two employees at its Seattle facility near the International District, effective June 30, according to the Washington State Employment Security Department.

—Microsoft is also shutting down MSN Encarta, its online encyclopedia site, as of October 31, 2009. The move is viewed as a response to the changing nature of reference materials and information access, thanks to competing sites like Wikipedia.

—Seattle-based Trusera, the online community healthcare startup founded by ex-Amazon exec Keith Schorsch, said it may close at the end of April unless it can raise more funding in a hurry. Trusera began in early 2007, raised $2 million in angel funding that summer, and rolled out its public site in June 2008.

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Sun Microsystems (NASDAQ: JAVA) has laid off 24 workers in Bellevue, WA, effective May 30, 2009, according to a notice from the Washington State Employment Security Department. Meanwhile, Exide Technologies (NASDAQ: XIDE), a maker of batteries and other energy-storage devices, has closed its facility in Sumner, WA, and has laid off 43 workers, effective immediately.

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Bellevue, WA-based Expedia and Seattle-based Impinj have had layoffs in the past week, according to reports in TechFlash here and here. Expedia isn’t saying how many positions were cut, but the news comes on the heels of another layoff last month. Impinj laid off 23 employees last week, or about 18 percent of its staff of 130 (the headcount Xconomy reported a month ago).

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At least five area companies that we watch at Xconomy have had significant layoffs in the past two weeks. They span the fields of energy, biotech, hardware, and software. The sad part is that none of these cases is particularly surprising. You can check our updated list of tech and life sciences layoffs in the Northwest here.

Here’s a roundup of the carnage from the past couple of weeks:

—Imperium Renewables announced yesterday it has laid off 24 workers at its biodiesel production facility in Grays Harbor, WA. (An undisclosed number of employees remain there.) The company said the cuts were made because of reduced demand for biodiesel, high feedstock prices, and highly volatile petroleum fuel markets. “These are difficult choices that will allow Imperium to survive and grow when the market turns around for the biofuels industry,” said John Plaza, founder and CEO of Imperium, in a statement. “We understand this is a difficult blow to the Grays Harbor community. We remain committed to Grays Harbor and are doing everything we can to reverse the course our industry has taken.”

—Cell Therapeutics (NASDAQ: CTIC) in Seattle cut 34 jobs, or about 28 percent of its workforce, leaving it with about 88 employees, as Luke reported last week. The move is connected to the biotech firm’s sale of its lone approved cancer drug, Zevalin. Cell Therapeutics has run dangerously low on cash. Two weeks ago, the company said it is closing its drug research center in Bresso, Italy, where it has 62 employees.

—Seattle-based Daptiv, which makes online project management software, cut about 24 positions two weeks ago, as reported by John Cook of TechFlash. The layoff leaves the company with about 100 employees. Daptiv was founded in 1997 (as eProject), and helps businesses manage their tasks, resources, documents, and portfolios.

—Spokane, WA-based General Dynamics Itronix, a maker of rugged laptops and mobile devices for field use, is closing its facility in Spokane Valley, which employs 353 people. The closure is effective April 24. The company has offices in Canada and Europe as well.

—Seattle-based Trubion Pharmaceuticals (NASDAQ: TRBN) cut a quarter of its workforce (about 25 jobs) two weeks ago, leaving it with a staff of about 75, as Luke reported. The move affects most areas of the company, and is part of a restructuring designed to invest in near-term opportunities such as a drug candidate for chronic lymphocytic leukemia. Trubion says the cuts will help it conserve enough cash to operate into the second half of 2010.

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In the burgeoning software hub of Portland, OR, one company is breaking new ground today. Jive Software, a maker of “social business software” that helps employees communicate with each other and manage their work information, is releasing a new product called SBS 3.0. The software is targeted to businesses, and its goal is to let corporate teams from inside and outside a given enterprise connect and collaborate more easily and effectively.

Jive’s new software combines its business collaboration product with its online-community offering into one package that it can sell to companies. The idea is that giving employees better access to a full suite of social tools will help them stay better connected to key departments and collaborators, thereby saving the company money and time in the long run. “Enterprise software has been a boring category for 20 years, and Jive is here to change that,” says Sam Lawrence, Jive’s chief marketing officer.

You’d expect to hear something like that from an experienced marketer like Lawrence. Yet in this case, he is talking about a bold strategic move by a small company that has its sights set on becoming something like Facebook for the office, putting it on a competitive collision course with Microsoft, IBM, and a slew of startups that aim to help employees get better at collaborating. Jive has evolved to this point from its founding in 2001, before the days of social networking. Its early forays into social software involved online forums and instant messaging, and were focused on support— things like getting customers to help each other rather than call a company with time-consuming questions.

By 2005, a lot of Web 2.0 and social software applications were becoming available, and Jive shifted its focus to helping employees communicate within their company and between companies—on things like who is responsible for which parts of a project, or how an R&D department is connected to other teams like marketing and sales. In the past few years, Jive has signed up customers like Intel, Nike, Electronic Arts, SAP, and VMware. The company raised $15 million in funding from Sequoia Capital in 2007. “Having them in our corner is a big, huge thing for us,” Lawrence says.

Here’s how the new product works. Customers get a dashboard view that shows …Next Page »

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General Dynamics Itronix, a manufacturer of laptops and mobile devices for field use, is closing its facility in Spokane Valley, WA, according to the Washington State Employment Security Department. The closure, which is effective April 24, 2009, affects 353 people. General Dynamics Itronix is based in Spokane and has offices in Canada and Europe.

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Microsoft’s ninth annual TechFest is going on this week in Redmond, WA. This is the big demo event where researchers from all of Microsoft’s research labs around the world (based in Redmond, Silicon Valley, New England, UK, India, and China) get to show off their results to product groups, vice presidents, professors, and other guests.

I spent the morning there, and (among many other things) heard some high-level strategy thoughts from Craig Mundie, Microsoft’s chief research and strategy officer, and Rick Rashid, senior vice president and worldwide head of Microsoft Research.

Just a few highlights:

—Mundie spoke about the importance of research to Microsoft’s long-term future, especially in the current climate: “I think research is one of the things we have to do to survive in the long term,” he said. “Even big and great companies can have 30- to 40-year lifespans. My responsibility is to balance the interest of shareholders, employees, and the public, who we service through these technologies. The company would struggle to survive and prosper if we didn’t have the research investment. Companies who are struggling say, ‘We can get by with acquisitions,’ and so forth. I think that contributes to their demise. So in building research labs outside the U.S. [for example], we start first with the idea of long-term prospering.”

Mundie added, “It’s a time when it’s even more important than normal. If you look back at the economic downturns, including the beginning of the Great Depression, the companies that fared the best continued to invest in research and product development. We remain very focused in both research and development across the company.”

Asked to comment on specific areas of technology that might spur economic growth, Mundie pointed to user interfaces and human-computer interaction, particularly in developing countries where people are just starting to come online.

—Rashid said, “One of the values of basic research is you don’t know what will come of it…You invest in basic research precisely because you don’t know what the future is going to hold—you’re going to have a war, famine, economic dislocation, or technology changes, or there’s a new competitor. If you knew what you were going to do, it wouldn’t be basic research.” He emphasized the importance of looking years down the road—it will usually be at least two or three years before a project beginning in Microsoft Research will be useful to product teams.

As for specific technologies that could make a difference to Microsoft, Rashid pointed to location-aware services for social networking, virtual environments, and projects that harness the power of imaging and video using mobile devices, among others.

Stay tuned for more from Microsoft’s research and innovation showcase…

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TTM Technologies, a Santa Ana, CA-based maker of printed circuit boards for electronics, is closing its facility in Redmond, WA, according to the Washington State Employment Security Department. The closure affects 369 workers, and is effective March 16, 2009. TTM has about 4,000 employees, spread among its facilities in California, Washington, Utah, Connecticut, Wisconsin, and China.

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Seattle-based Razorfish, an online advertising company, has confirmed it has laid off about 70 people in Seattle, Portland, San Francisco, and Los Angeles, according to the Seattle Times. Razorfish is an independent subsidiary of Microsoft, acquired in the Redmond firm’s 2007 deal for aQuantive.

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The damage to Bay State technology employment rolls was far greater in January than in any month since the downturn began. By Xconomy’s count, New England tech firms laid off at least 5,675 workers as 2009 began, compared to 2,028 layoffs in November and 1,428 in December, the two worst months prior to January.

Massive job cuts at two firms at the foundations of the local technology economy were the prime contributors to January’s grim statistics. Hopkinton, MA-based EMC announced January 7 that it would lay off 2,400 workers, and Bose in Framingham, MA, said it would let 1,000 workers go on January 20.

But other major area employers weren’t far behind: Brooks Automation in Chelmsford, MA, announced 550 layoffs on January 26; Sepracor, the Marlborough, MA-based maker of Lunesta sleeping pills, announced it would eliminate 530 jobs on January 29; and Teradyne in North Reading, MA, closed out the month on January 30 by announcing it would cut its workforce by 532 positions. (Not all of these reported cuts will affect Massachusetts employees—in most cases, companies don’t break down their reduction-in-force announcements by region.)

The cuts at local firms were merely a reflection of the national trend, of course. In 2008, technology companies laid off nearly 187,000 people altogether, according to a count last week by Chicago-based employment agency Challenger, Gray, and Christmas. While the company hasn’t finished compiling January figures, it said “technology firms appear to be continuing their job-cutting spree in 2009,” with giants like Sprint/Nextel, Microsoft, Motorola, IBM, Intel, and AMD leading the way.

We’ve been tallying up the local job losses on our Boston Tech Layoff Tracker, which we’ll continue to update as the layoff reports come in. Here’s what the January figures looked like, in the end:

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Seattle-based Marchex (NASDAQ: MCHX), a local search and advertising firm, announced today it is cutting 15 jobs, or 4 percent of its staff, in a restructuring. Marchex also said it is actively adding positions where it needs further skills and resources.

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Coffee is so last year. Just ask Rob Grady, the former Starbucks executive who joined Seattle-based social publishing startup Wetpaint as senior vice president of marketing earlier this month. OK, Grady still enjoys a triple tall Americano or a double tall nonfat caramel macchiato from time to time—his new favorite Starbucks is in the Wells Fargo building in downtown Seattle—but he’s moving on to a different kind of challenge now, and last week he told me why.

Grady was Starbucks’ vice president of global beverage (one of the best titles ever, in my opinion). His team was nearly 100 strong and produced several billion dollars in revenue. But the past year or so has been a time of great change at Starbucks, what with declining sales, the economic downturn, and Howard Schultz’s return as CEO. Grady didn’t point to any of those as reasons for leaving, but it sounds like he wanted to move on to bigger challenges.

“Two things have threaded my career,” Grady says. “Working for a company that can make a difference in the world from a social perspective. And creating a great consumer experience.”

Which is where Wetpaint enters the picture. It’s a startup, backed by $40 million in venture capital, that helps customers generate all sorts of new online content to turn business websites into Web 2.0 social-networking beehives (among other things). “Social publishing is the largest content-creation platform going forward,” says Grady. “Anyone on the Internet with a passion has a way to organize and galvanize around a cause…Online social publishing has great economic promise because it enables content creation that has much lower cost, but has great value.”

Matt Hulett, the chairman and CEO of Mpire (maker of Widgetbucks), has some valuable outside perspective on Grady’s move. He worked with Grady at RealNetworks back in the 1990s, and has known him for 14-plus years. “Rob is a powerful mix of analytic thinking, strong leadership, and a real passion for building creative products and solutions,” Hulett says. “If a guy like Rob is going to Wetpaint, …Next Page »

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Peabody, MA-based medical imaging and airport security company Analogic (NASDAQ: ALOG) said today that it will reduce its global workforce by 140 positions, or about 9 percent, in response to declining demand for capital equipment among healthcare organizations. The company said the cuts would save $9.6 million annually. We will update the Boston Tech Layoff Tracker accordingly.

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Boeing is cutting about 10,000 jobs this year, or 6 percent of its workforce, according to chief executive James McNerney. The news was announced in a conference call this morning. Boeing cited decreased revenues and the global economy as reasons for the cutbacks, which will occur through a combination of layoffs, retirements, and attrition. More than half of the losses will be in Washington state, according to the Seattle Times.

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MoneyAisle, the online marketplace for banking products that we profiled shortly after its launch last June, said today that users have now put more than $100 million into certificates of deposit and high-yield savings accounts via the company’s reverse-auction system, in which banks submit competing bids for potential customers’ business. MoneyAisle CEO Mukesh Chatter said the company’s ability to reach the $100 million milestone in just a few months was in part a reflection of the economic downturn and consumers’ search for investments with less risk than the stock market. “Tripling our deposits from the previous quarter shows that consumers are looking to invest their money in a safe FDIC-insured growth account from a trusted source,” Chatter said in a statement.

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Have angel investors become the new venture capitalists? Earlier this month, my colleague Wade Roush reported on a presentation by James Geshwiler of the Boston-area group CommonAngels about the changing nature of angel investing. Between Geshwiler’s comments and what I’ve been hearing around Seattle, it seems like the dynamic between angels and VCs has shifted in the tech community.

To get the local angel perspective, I had a chat with Geoff Entress, one of the most prolific early-stage investors in the Northwest. Entress, a former venture partner with Seattle-based Madrona Venture Group, works closely with several regional investor networks, including the Alliance of Angels, Keiretsu Forum, Zino Society, and Founder’s Co-op. “Things have changed radically in the angel community the last few months,” Entress says.

The reasons for this include the economic downturn and lower startup costs. Particularly on the Web 2.0 or social networking side, Entress says, startup companies can now realistically turn to angels, who are usually a network of individuals who have run companies themselves and are able to put in a few hundred thousand dollars in seed capital. “It costs a lot less to start a business these days,” he says. “Companies may raise low millions and that’s all the money they’ll ever need, and they’ll get to cash-flow positive. A lot of companies I’m in, that’s what’s happened with them.”

Whereas venture capital firms typically look for much bigger deals. If you’re a fund with a billion dollars in assets under management and you’re talking to a startup that may ultimately be worth $50 million, Entress says, the potential returns aren’t big enough for the investor. “You’ve got to do better than that. You’ve got to get bigger amounts of money in and get the same multiple to really move the needle for a huge fund. We were seeing all this before the economy turned bad,” he adds. “Optimally, what a venture firm needs is to get the first couple million in, but then the idea is they’re going to put more money in—tens of millions of dollars in order to be a meaningful deal for them.”

Entress then summarized what he sees as the top three trends in angel investing in the current climate:

—Valuations of companies are substantially down. “You’re seeing huge decreases, 80, 90 percent in some cases, and about 50 percent on average,” he says. That must be factored into any investing strategy.

—Angels are getting a chance to invest in deals that used to go to venture capitalists. “VCs have been focusing on triage,” Entress says. “Everyone’s worried about financing risk going forward. If you’re worried nobody’s going to fund a company down the road, you’re going to hold back.”

—Angels can acquire existing companies and websites at the right price. “There are opportunities for interesting strategic combinations,” Entress says. As recent examples, he points to his acquisition of Seattle startup Judy’s Book last year, as well as Pet Holdings’ pickup of Fail Blog.

So, are angels the new VCs? Entress won’t go that far. “Angels have become an alternative to VC, particularly for Web 2.0 deals,” he says. It is true, he adds, that angels have stepped in to fill some of the early-stage funding gap. But it sounds like although they may compete for more deals now, angels and VCs still have very different strategies and outlooks—and it will be interesting to watch how each continues to adapt to the climate.

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