If there is one group of business people looking ahead these days, it’s entrepreneurs.

They are still pushing the envelope of capitalism and technology, looking for the next best thing and ways to build companies while also making some money.

Some 600 of them showed up last Wednesday to talk about the state of the high tech, venture and life science economies. And they heard mixed signals — just as anyone following Wall Street hears these days.

For many, times are bad. For some, opportunity beckons.

Some investors are still willing to take risks and invest in entrepreneurs. Others have had enough.

“How did we get into this mess?” asked Howard Anderson, founding partner and senior managing director of YankeeTek Ventures, in his keynote address.

Much of the reason for the dot-com burst and recent slumping economy is of “our own creation,” Anderson told the crowd which gathered at the Sheraton Imperial.

Venture spending increased from a little over $3 billion in 1990 to $105 billion in 2000. With up to 6,000 companies being funded, that’s an average of $20 million per company. But not all those companies deserved that much.

“Capitalism overdosed…there were too many companies,” Anderson said. “We made some mistakes. Was e-Toys ever going to replace Toys-R-Us? Was the first Internet bank going to topple Citicorp? Maybe not.”

Speaking from personal experience, Anderson rehashed a botched investment Battery Ventures made in Petstore.com. Battery’s West coast office was interested in the online pet supply company, in large part because other firms had shown interest.

“That’s the fastest way to lose money,” Anderson said of that investment logic, adding that the company’s business plan didn’t make much sense either. “In five years, if the dog doesn’t die, you’ll finally recap your customer acquisition cost, but not made a dime.”

Y2K also had something to do with “the mess,” says Anderson, who calls the date-rollover bug the “biggest snow job in history.” He says the event caused panic in board rooms and IT budgets to swell, with anything that needed upgrading said not to be Y2K compliant.

“Y2K was never really that big of a threat,” Anderson told the audience, as if they didn’t already know.

He also compared the Research Triangle to his hometown of Boston, saying the areas were not that different when it came to launching successful companies. Anderson laid out three requirements for this success: first rate engineering schools, good templates (companies that have already succeeded), and sophisticated capital.

“These don’t guarantee success,” he said of the requirements, “but the lack of them will guarantee failure.”

‘Investors Appetite for Deals’

The bad guys in the eyes of many entrepreneurs these days are the venture capitalists.

“It’s a great time to be a buyer,” said panel moderator Norvell Miller, managing partner of Southeast interactive Technology Funds. Miller backed this statement up by saying there is great management talent available…maybe the best in 20 years, he said. There is not shortage of ideas, either, he added.

Miller asked four panelists, representing TPG Ventures, Olympus Partners, Noro-Moseley and Intel Capital, to say what they were most optimistic and most concerned about. What he got was a wide array of responses, representing different viewpoints.

“What’s most exciting to me is seeing the entrepreneurial effort and willingness to take a chance,” said Rusty French, a last minute panelist representing Noro-Moseley. “The VC industry is getting ‘back to the basics.’ We’re no longer chasing pipe dreams, and a lot of cowboys are out of business…and that’s a good thing.”

But Mike Guthrie, general partner at TPG Ventures, questioned French’s “back to the basics” mentality. “Are people still in the business of underwriting risk or not?” he asked.

Until public capital flows again, private investments won’t follow, said Guthrie. As a result, a lot of money is “sitting on the sidelines,” and not funding companies.

“Pockets are deep and their arms are short,” Guthrie said of venture capitalists, garnering a few chuckles from the crowd of mostly entrepreneurs. “People aren’t reaching down and grabbing their wallets the way they used to.”

‘Alternatives to VC Financing’

After finding that venture capitalists either weren’t interested or didn’t propose agreeable terms, several local companies turned to alternative means, such as credit cards or loans from those close to them.

“We have no investors,” says Josh Chodniewicz, founder and chief executive officer of Art.com. “Our investors are Visa and MasterCard. We also borrowed money from friends and family.”

Chodniewicz said his company has been profitable for the last two years, but things weren’t so easy in the first two years, when Art.com didn’t even sell a single poster.

Why not seek outside funding?

“We had an interest in going the VC route, but they asked us to compromise our business model,” Chodniewicz explains. “We wanted to do things our own way.”

That’s part of the reason deals are not being made, according to Vivek Wadhwa, CEO of Relativity Technologies.

“VCs are not spending money…they’re asking for an arm and a leg,” Wadhwa says. “They’re asking everything. The terms and conditions are so onerous; (companies) are giving up everything for a small amount of financing.”

‘The Analysts and Experts’ Outlook on the IT Horizon’

So, what’s the next new “thing”?

Moderator Dave Rizzo, the president and CEO of MCNC, asked a group of panelists to explain how they would invest $100,000. The resounding consensus: wireless.

“I’m a big fan of wireless technologies,” said Greg Pelton, senior director of the Cisco Technology Center. Pelton compared the “hot spots” being created everywhere from urban downtowns to residential neighborhoods to the operations of phone companies more than a century ago. “Local communities are setting up their own service,” he said.

Wachovia Securities’ Ed Caso also likes wireless, but thinks it will only work in the commercial space.

“No one is going to make a dime in the retail world,” Caso said. “It’s all about linking back into the system.”

The key technology that will allow wireless networking is that applications are build on Internet Protocol (IP) telephony, Pelton said in a plug for Cisco. He said the two areas where more creativity is needed are wireless applications and video.

With video, Pelton said surveillance is one of the next big waves, and it will need to be managed, supported, etc. Video conferencing is also increasing in popularity as business travel becomes less frequent.

“People are traveling less, which is good for the video conferencing market,” Pelton said. “The networks are there, and with more innovation in the set up, it could bust open.”