As storm clouds gathered over the economy in recent years, some tech executives and entrepreneurs scrambled to reduce risk in investment portfolios—especially those who had much of their net worth tied up in their own companies.

Russell Klein, a co-founder of SendMe Inc., a profitable San Francisco startup that sells subscriptions for mobile-phone entertainment applications, shifted his liquid-investment portfolio from close to 90 percent in stocks to roughly 70 percent in stocks, with the remainder in domestic and international bond funds in both the private and government arenas.

And recently, he has increased his investments in high-tech companies, in which he’s heavily invested through his own ventures, because he saw the low valuations high-tech companies are facing as a good investment opportunity.

Klein uses Sarat Sethi of Douglas C. Lane and Associates in New York to manage some of his liquid assets.

“In Silicon Valley, we’re all gamblers,” said Klein, who was an executive at ZDNet when it went public in 1999 and then was acquired by CNET for $1.6 billion in October 2000. “We should have deference toward that, and make sure we are lining up the rest of our financial portfolio on a grounded understanding of the true odds we are playing in Silicon Valley.”

Richard Stone, CEO of Salient Friedman Wealth Management in San Rafael, California, said he’s recently picked up large new accounts from clients who used to feel comfortable managing all of their money on their own, but who have grown increasingly uncomfortable as their portfolios have dropped in value.

And he’s fielded a lot of questions lately on how much to draw annually from shrinking investment portfolios.

“When you have 60 percent equities plus and the balance in fixed-income investments, you can afford 3 to 6 percent,” he said. “The more equities, the more you can take out. The rule of thumb out there is 4 percent.”

That means clients should take $40,000 per year from a $1 million portfolio, and if it doubles to $2 million, they should withdraw $80,000 per year.

Stone recently advised a former tech engineer with an $18 million portfolio that had dropped to $14 million in value not to be overly conservative. People forget that the markets will bounce back, he said.

Greg Welch, principal at LS Investment Advisors in San Francisco, has strong opinions about building a portfolio during a recession.

“It’s strong balance sheets, large, broadly diversified companies, and…given we’re in a much more global business environment, own companies that get a significant portion of revenue in markets outside the U.S.,” Welch said.

Welch advises a broad array of clients and customizes portfolios for each one. In addition to that diverse equity portfolio, he steers executives and entrepreneurs who may have lots of money tied up in their own companies and the high-tech space toward high-quality fixed-income securities that pay a fixed return. One vehicle Welch has advised clients to invest in recently is California Revenue Anticipation Notes, which return about 3.5 percent interest and which Welch considers fairly low risk.

One thing that’s clear for tech executives: In times of recession, cash is king.

Kevin Hartz, co-founder and CEO of Eventbite, has the bulk of his personal wealth invested in companies he has started, nearly 20 other private companies, and venture and hedge funds, including Clarium Capital, Outlook Ventures, and NEA.

“The amazing thing about that is it’s all paper money. It’s illiquid,” Hartz said. “It doesn’t fluctuate like the stock market.”

Much of his liquid net worth is invested with Divesh Makan, a San Francisco-based adviser with Morgan Stanley who specializes in wealth management for entrepreneurs. Because Hartz has so many illiquid assets, he tends to keep his liquid portfolio almost entirely in cash.