Tesler is talking about Spree.com Corp, a business-to-business Internet company (www.spree.com) in which TCV has invested $5 million. Spree (unrelated to the Spree telephone calling card) is in the early stages of building a sales pipeline for its new business model, and will need more cash to complete its plans. "They're going to be looking at us for more capital, aren't they?" says Jay Hoag, a partner with Rick Kimball, co-founder of TCV. "I don't want to be supporting them until who knows when."The partners agree to keep funding Spree, awaiting some key sales milestones. But, muses Hoag, "There's nothing easy about this story." Spree executives didn't return calls seeking comment for this article.

Venture capitalists such as TCV, whose war chest includes a new $1.6 billion fund, usually thrive when the stock market is hot. They invest in young, private companies with little more than an intriguing business plan and some experienced entrepreneurs; eventually, they hope to sell their investments either to stock-market investors (in an IPO) or to other companies in related industries, making a hefty profit.

All across the venture-capital arena, high-profile young companies, particularly `dotcoms,' have struggled and needed bailouts - such as this week's emergency infusion into drkoop.com, which isn't a TCV deal.

There are hard decisions to be made at this unprecedented 11-hour marathon meeting, some of which could spell life or death for the fledgling technology companies in TCV's portfolio. And for the rare outside observer, the prolonged debate is a glimpse behind the curtain into the way venture investors are reacting to the changing realities of the public markets.

On the surface, TCV doesn't seem to have much to worry about. Many of its IPOs have done well: Ariba Tech, a B2B e-platform provider, is up 2,383% in the 18 months since its IPO; shares of CacheFlow, an Internet data-storage firm are up 282% since its IPO last November. Last month, TCV scored another home run when a portfolio firm, Alteon WebSystems, agreed to be acquired by Nortel Networks Corp for $7.8 billion.

Aside from Spree, TCV's portfolio includes other struggling companies, like Petopia.com (www.petopia.com), one of a myriad of Internet pet-supply retailers in which TCV has invested $15.5 million. Most investment bankers believe Petopia won't be able to complete a planned IPO, leaving it in a cash crunch with few alternatives. Even TCV's healthy companies will have trouble tapping jittery public markets for new financing.

The partners see the out-of-headquarters strategy meeting - known in business as "an offsite" - as a chance to brainstorm and come up with ideas to make sure their still-healthy companies survive. They have been lucky so far: Only six of the 100-plus companies are troubled enough to be placed in TCV's in-house "intensive-care unit." But they can't afford to let that list of "problem children" grow. They consume time and energy that partners could better spend on picking promising new investments for TCV's new $1.6 billion fund - one of the industry's biggest. But if the partners decide not to devote more time, energy and cold cash to their problem companies, the performances of the companies and of TCV's funds could suffer. Since TCV is only a few months away from going back to investors to ask for backing for the next TCV fund, that would be bad news.

For many of the ICU inhabitants, there isn't much to be done, Hoag concedes. When the discussion moves to one much-debated online retailer, the partners sitting around the table groan. An IPO isn't possible. A merger might be, even though TCV still might not recoup its investment. "There's nothing else we can do for them right now other than be a matchmaker," Hoag concludes morosely. It isn't only the need for cash that comes up for debate, however. In fact, even more time is spent by partners debating how and where to find CEOs, financial officers, programmers and business-development talent for portfolio companies.

-- (The Wall Street Journal)