June 24, 2009
- Boston, MA
Funny thing about economic disasters: They tend to spawn a bevy of new businesses. It's not that a recession is the best time for pie-in-the-sky thinking; rather, it's when pie-in-the-mouth issues become most pressing.
"The tantalizing successes of some startups, coupled perhaps with the rise in unemployment, have more people pondering new ideas and new careers," Doug Chertok, an angel investor and venture capitalist at Vast Ventures, told the E-Commerce Times. "In my opinion, that's a great thing -- gets more people thinking and doing, and out of some of the bureaucracy of corporate America."
We call this "entrepreneurship," but mostly it's a creative way to eat -- and if you're really good at it, it'll feed you far more than a meal or two. While a startup operation may be your best shot at fine dining in these trying times, it's a long and scary trek from famine to feast.
"'New' money is almost impossible to get, no matter what capital sources say," James C. Roberts III, an attorney with Global Capital Law Group, told the E-Commerce Times. Despite this bitter recession, startups will generate the next round of billionaires if history does indeed repeat itself. Still, a startup is a high-stakes gamble no matter how great the initial idea. So where do you find the cash to fund your bet?
The Money Queue
This is tricky business, finding the money. Seems the green stuff has slipped from nearly everyone's grasp.
"Risk capital is scarcer than it has been in a long time," Mike Fitzgerald, founding partner of Commonwealth Capital Ventures, told the E-Commerce Times. "Venture funds will husband their cash for their existing portfolios making new deal funding tougher."
"Investors in venture funds are less liquid than ever, and new money coming into the business will continue to shrink," added Fitzgerald, "again, putting pressure on the number of new deals being done."
Indeed, angel investors or venture capitalists may nix your idea not because your nose-picking widget is delusional but because they are hoarding pennies and scrambling for cash as much as you are.
Click here to continue reading the article.
|
