• BusinessWeek, Monday, November 10, 2008 11:15 AM

BusinessWeek has a lengthy profile of Reid Hoffman, a Silicon Valley entrepreneur whose investment portfolio includes some of Web 2.0's hottest properties, including LinkedIn, Facebook, Ning, Digg, Six Apart and Technorati. As an active investor, Hoffman receives daily solicitations from young companies looking for funding, but as the economic climate worsens, Hoffman is engaging fewer opportunities as the value of his portfolio declines. In fact, on Nov. 5, LinkedIn, the company he founded, announced that it was laying off 10% of its staff, a move that surprised many given LinkedIn's standing as one of the most bankable social networks.

Hoffman is going through a similar restructuring process with some of his other investments, too, as the credit crunch forces Silicon Valley's startups to formulate survival and savings strategies. Just how influential is the Linked-In founder? According to Peter Fenton of Benchmark Capital, a venture capital firm, "Without Reid, (many) entrepreneurs are left with limited options," says Peter Fenton, a partner at Benchmark Capital. Mary Hodder, a Silicon Valley entrepreneur, thinks the Web 2.0 guru, like other Valley investors, will be forced to subject his portfolio to triage. "He'll pick a few likely to win and keep them funded," she says.

During the interview, Hoffman doesn't discuss his portfolio, but he says that the likely ad recession will cause many young companies to make "painful adjustments." He says that even if those companies attract investors, they should be ready to sell big equity stakes, or sell out altogether. "These days, survival trumps the prospect of a jumbo payday," the report says, paraphrasing Hoffman.

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