Of VCs, IPOs, LBOs and Dot-Coms; Some Tension at the H&Q Conference

Finally, a little tension breaks out.

On

Day One, the

Chase Hambrecht and Quist

conference has been a testament to peace and tranquility. H&Q CEO and Chairman

Dan Case

smiles and pats our heads during a pre-lunch press conference, "The IPO framework is not attractive compared to a month or two ago, but the availability of capital is still at record levels," he says. No hysteria. No panicking. No fright or flight. "The average Internet companies are 40% off their highs, but they're also 40% off their lows and up as much as two times over last year's prices."

No problem, man. Have a croissant.

But Chase Manhattan Vice Chairman

Jimmy Lee

hinted at the clashes to come during lunch.

Case relayed the question he'd been asked the most on the Technology Conference's opening day, which was whether the conference would move stocks.

"No one's asked me that. In fact, no one's asked me any questions, beside, 'Would you like a cup of coffee?' " cracked Lee.

Everyone needs a little love sometime. Even big New York parents.

The lunchtime panel featured some good-natured ribbing, starting with the confession by pundit and New Enterprise Associates partner

Stewart Alsop

that he had bought 300,000 shares of

Webvan

(WBVN)

at just below $10 a share. (The online grocer now trades around 6).

LBO man

David Bonderman

, founding partner of

Texas Pacific Group

, quipped that he didn't understand the logic behind Webvan, which is in the same 1% margin business as

Safeway

(SWY)

. "Just because it's on the Web, doesn't mean it's good," Bonderman laughed. "Just because it has negative cash flow, it doesn't mean you should invest."

The conversation wove around awhile, but Alsop finally seized the opportunity to stand up for his investment. "I've never met an unhappy Webvan customer. In 15 to 20 years in technology, I've seen that as a great factor of success."

Somebody give Stewart a hug here. Stewart, we love you. You are a good person.

Investment banking hall of famer

Sandy Robertson

, now working on his new

Francisco Partners

venture, took the gloves off and interjected that maybe what a lot of the flailing Internet companies need is the tough love of classic VCs such as Don Valentine and Arthur Rock. "They replaced presidents fast. They didn't give the CEO another six months, and I think that's what made them great," Robertson says.

Gulp.

Bonderman got a little touchy at that point, because, in the LBO game, he constantly deals with failing or misunderstood companies. "It's hard to change management when you've got technology issues." All right, everyone. Simmer down here. Finally, a little tension breaks out.

He said the off-line giants don't need Internet help anymore. "

GM

and

Ford

find out they don't need

Kleiner Perkins

; or they need them as a minority partner for their Rolodex only."

Alsop held up the VC side: "Oh yeah, the Big Three automakers think they can build an exchange. It still hasn't been implemented, there's no direction as to who's leading it. And who exactly wants to be CEO of that?"

Robertson hit it all home with his informal study of the habits of behind-the-curve business school graduates, who are currently flooding dot-coms. "They are risking their careers by going to those so readily, and often joining the wrong ones."

If only they'd stayed home and been nice, upstanding investment bankers. Back to the company sessions! Let the healing begin.

Tish Williams' column takes at look at the people who make Silicon Valley tick. In keeping with TSC's editorial policy, she doesn't own or short individual stocks, although she does own stock options in TheStreet.com. She also doesn't invest in hedge funds or other private investment partnerships. She breathlessly awaits your feedback at

twilliams@thestreet.com.