In my recent post, The State Of Venture: The Ugly, The Bad And The Good, I focused on how the current economic environment will impact the venture industry. What I did not do in that post was discuss DFJ Gotham's investment intentions. After having received a number of emails from entrepreneurs asking if DFJ Gotham is actively investing, I realized that I should write a separate post that outlines our investment strategy in this market.

In a nutshell, we're actively making investments now and will continue to actively invest going forward. There's good reason for this: based on the arguments I made in my The State Of Venture post, now is great time for us to make investments. Here's why:

We're at the beginning of our latest fund, the investment cycle, meaning we are at the right stage of the fund to be investing aggressively. We have only made 7 of the 20-25 investments that we plan to make out of this fund. Our investments have ranged from Drop.io and ExpoTV (B2C companies) to Worktopia and IZEA (B2B companies).

We believe that, in the current environment, companies that we capitalize will have a unique competitive advantage. As I stated in my prior post, while entrepreneurs will have to make the money last, access to capital over the coming years will afford companies the opportunity to build their operations, acquire talent and generally get ahead while many of their competitors are under-funded.

This market has also created a favorable investment environment for VCs. The market is filled with very smart, newly-minted entrepreneurs who recently left their day jobs due to the absence of bonuses or rolling layoffs.

Additionally, our new investments are not likely to be significantly impacted by the current exit environment.  While exceptions exist, many of the companies entering our portfolio in the near term will not be seeking an exit until 2012 or beyond - a period which will likely have a very different exit environment.

The bottom-line is that I believe that it is a great time to make early stage investments. We plan to invest actively and I hope other early stage firms do too – that’s the best thing VCs can do for the venture community and the economy at large.