Editor’s note: This is the latest in a series of interviews with leading technology executives about challenges facing entrepreneurs and startups in what could be the “nuclear winter” of 2009.

DURHAM, N.C. — Richard Kent, the newest member of the venture capital team at Intersouth Partners, is worried that the global economic slowdown could lead to an outright “freeze” on venture investments.

“The main concern is that the economy will continue to worsen, putting more pressure on institutional investors,” Kent told Local Tech Wire. “If this happens, investments in venture-backed companies, now being done cautiously and conservatively, may slow even more, and in the worst-case scenario would freeze.”

That chilly forecast from Kent, who led Triangle startup Serenex through its acquisition by drug giant Pfizer, is balanced by one note of optimism.

“We are seeing companies continuing to meet milestones and build value,” he said. “There is still great science being supported and great technology being developed. A strong entrepreneurial spirit can navigate difficult waters.”

LTW’s Q&A with Kent:

A “nuclear winter” appears to have descended upon us as a New Year begins. But in the last such "winter,” the Internet and Web 2.0 emerged as entrepreneurs seized upon tough times to deliver innovation and to grow their businesses or start new ones, not just survive.

What is your advice to fellow and would-be entrepreneurs entering the New Year – Conserve, cut or invest? None of these? Please explain.

The answer is situation- and company-dependent. The overarching theme is a difficult financing environment, meaning that each company without revenue must do whatever is necessary to get to its next financing event. For some companies, this will mean focusing on their lead, and presumably most valuable, program, letting all other projects lie dormant. For other companies, actually reducing headcount may be required. It would be unusual for companies to be able to aggressively move all of their desired programs forward in this environment.

For companies with revenue, getting to the point of positive cash flow is crucial. If positive cash flow is within reach, aggressive but prudent investment may be reasonable. All venture-backed companies must consider that the odds of an IPO in the foreseeable future are low. In considering investor exits, companies must structure their spending to build value for a possible acquisition. If a near-term acquisition scenario is realistic aggressive, but prudent investment to get “over the line” may be appropriate. If an acquisition in the near term is not realistic, companies must conserve their resources to survive until the environment has improved.

Who will be not just the survivors, but the winners still standing when the recession ends sometime in 2009?

The answer to this question is the same whether times are recessionary or expansive. Those companies that build value will thrive and will grow with additional financings or they will be acquired. This value cannot be defined by the company itself, but will be determined by the marketplace in the case of new investments, or by the interest of potential acquirers. Whatever resources are available to companies must be targeted to value-creation. If value is successfully created, those companies will be winners.

What is your biggest fear/concern entering the New Year?

The main concern is that the economy will continue to worsen, putting more pressure on institutional investors. If this happens, investments in venture-backed companies, now being done cautiously and conservatively, may slow even more and in the worst-case scenario would freeze.

Conversely, what are you most optimistic about?

We are seeing companies continuing to meet milestones and build value. There is still great science being supported and great technology being developed. A strong entrepreneurial spirit can navigate difficult waters.

If the IPO markets remained closed, how can life-science, medical-device and other capital-intensive startups best generate cash to keep investors onboard and the company doors open while pursing R&D?

All venture-backed companies should have a management team with great business-development skills. Partnering with larger companies can be an excellent way of securing non-dilutive financing and gaining access to additional resources and skill sets. The management team should also make a complete inventory of government and other grants for which they might compete. Appropriate opportunities should be pursued aggressively. Also, while it is commonly said that entrepreneurial CEOs are always raising money, it is especially important now for CEOs to “sell” their companies at every opportunity. They should be constantly in front of potential investors and acquirers. Even if a presentation does not lead to an investment, the CEO should be attuned to receiving feedback that will sharpen the message for future investment pitches.

What do you believe will be executives’ biggest challenges this year – Financing? Growing sales? Balancing the cutting of costs with need for R&D as well as consumer support?

Management’s job is to balance resources against opportunities. The upcoming year will put these balancing abilities to the test. Investors and boards will push to conserve cash, while employees will want to see their programs move forward. Executive teams will have to marshal all of their knowledge and creativity in both program and people management to meet this challenge.

Will venture financing tighten, especially for startups, as recent surveys have indicated? If so, how do you (or) your clients (or) your portfolio companies adapt?

Venture funding will tighten, although the extent to which this happens is dependent on the overall economy. Companies will adapt by conserving cash, focusing on programs that generate value in the short term, pursuing appropriate external alliances to generate non-dilutive funding, investing to get to cash flow positive if achievable in the near term, and making sure they have the right management team to guide the company through lean times.

Do you believe off-shoring of jobs will increase this year? Please explain.

Large companies will continue to off-shore jobs as they look to reduce costs. Off-shoring by smaller companies is being done and will continue, but will be done carefully and in a measured way, since smaller companies do not have the resources to audit off-shore providers. Poorly done work by off-shore providers may lead to program delays and negate the value gained by lower off-shore costs.

What advice would you offer to job-seekers in such a tough environment?

Be flexible. Build a network of contacts. Understand that you may have to be mobile to get the right job. If you are working now, use every opportunity to expand your experience and build your skill base.