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The life blood of Silicon Valley is venture capital, but the industry is under huge strain. Some estimates suggest venture capital dollars could be cut in half.

shannatellermanOn Monday, Sept. 21, to kick things off at the DEMO conference in San Diego, we’ve organized a dealmaker dinner, where we’ll discuss “The good, bad and ugly of raising venture capital in the downturn.”

One thing hasn’t changed: Entrepreneurs with a great idea usually need money in order to scale their businesses rapidly. The founders of Google, YouTube, Facebook, Oracle and Apple all benefited from getting early money from investors, whether in small or large amounts. If they hadn’t raised money at the right time, they’d have been stunted.

We’ve got some great speakers for the dinner. We have Shanna Tellerman (top left), chief executive of Sim Ops Studios, creator of Wildpockets, which simplifies the delivery of 3D content through the web browser. She launched at last year’s DEMO and recently raised a $3 million round of venture capital from SK Telecom (something we haven’t reported until now). She actually raised the money in March, during the depths of the recession and has some war stories to share about her experience.

mike-olsonAlso on hand will be Mike Olson (left), a veteran entrepreneur who also just raised money during the downturn, for his latest company, Cloudera. The company seeks to make large web and data computations more efficient for companies (recent coverage here). Olson’s experience is especially relevant. His previous company, Sleepycat Software, an open-source database company, tried but failed to raise money in the wake of the last Internet boom. Because of skepticism pervading open source at the time, investors wouldn’t touch it. Olson plowed forward anyway, and managed to sell SleepyCat for a decent amount to Oracle in 2006. Still, it wasn’t the massive multi-million dollar result that some companies raising venture capital have achieved — which is why he’s taking VC now, at a time when you could argue the terms aren’t very good at all to do so. Like Shanna, he’ll be able to talk about the pall hanging over Sand Hill Road (ground zero for Silicon Valley venture capital firms).

mark-heesenFinally, we’ll have Mark Heesen (right), president of the National Venture Capital Association, who can elaborate on the latest performance and return data and what it all means for the industry (we’ll address the argument made by Benchmark’s Bill Gurley that it could be cut in half). The dinner attendees will be the incoming class of 60 companies and investors attending DEMO.

After the dinner, we’ll break for the opening reception. This is one of my favorite things about DEMO: the networking. DEMO’s format pulls attendees out of their routine. They fly to a resort location — this time, it’s in San Diego — and then they’re thrown together with other high-powered professionals in a mix of jam sessions, dealmaker receptions and wine dinners. With the all-star crowd we’ve invited (and we’ll be announcing more people shortly), it’s a great way to push business ahead. Whether its VCs, entrepreneurs, corporate development executives or press — they’re all there.

More details here. Tickets here.

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