Too Much Hype At PEA? Jim Breyer Sounds Gloomy

Despite the fact that Accel won TWO awards this week — it got the top spot on Red Herring’s Top 100 Global Venture Capitalists list and was elected to Dow Jones Private Equity Hall of Fame — Accel’s Jim Breyer did not sound upbeat today when he was interviewed about the economy from the PEA conference by CNBC.

“I don’t think things are nearly as optimistic as we’ve been led to believe at this conference,” he told CNBC’s Rebecca Jarvis. “I have a great fear that today there is very little of a small business and consumer-led recovery. Until we see a small business and consumer-led recovery, I would advise great caution for the time being.”

Breyer is worried because “there’s no incentive now for a small business to take significant risk,” he told Jarvis, because they’re uncertain about healthcare and the economy and international trade. He doesn’t see small businesses hiring or spending, even though big businesses are starting to spend.

Based on his talks with the customers of Wal-Mart and Dell, where he sits on the boards and walks around the stores, he’s predicting “a late Christmas.”

But not everybody is suffering. Facebook and Etsy, two companies that happen to be in Breyer’s portfolio, aren’t, according to Breyer. They are undervalued, he said, and “are performing extremely well.” He also predicts bright futures for mid-range technology companies — especially if they’re in infrastructure, cloud computing or virtualization — because there’s so much deferred spending on IT.