Outlook for Start-ups | Knowledge @ Wharton

Interesting article from Knowledge@Wharton about the outlook for start-ups in 2010. Not sure exactly why they didn’t make it an outlook for 2011 (it is fall of 2010?), but whatever. Its an interesting piece on starting new firms during less than robust economic times.

In fact, the numbers show that the pace of start-up formation has picked up despite — or even because of — the recession. According to a report released in May by the Ewing Marion Kauffman Foundation, a non-profit focused on entrepreneurship, the number of new businesses created between 2007 and 2009 was the highest level in 14 years, even exceeding the start-up boom of 1999-2000. In 2009, 340 adults out of every 100,000 started a business each month, up 4% from the pace in 2008.

The uptick in entrepreneurial activity might seem “counterintuitive to some,” says Thom Ruhe, director of entrepreneurship at Kauffman. “But the economic situation of the last few years has shattered the image of job security and economic stability. And it is a natural progression for some people to see entrepreneurship as an avenue for economic determination. People are saying, ‘I will control my own destiny.’”

Yet if more people are willing to make that leap to start their own business, the challenges in keeping that enterprise alive are steep. Angel investments, funds from wealthy individuals that are a source of capital for many start-ups, fell sharply in the wake of the 2008 financial crisis. According to the Center for Venture Research at the University of New Hampshire, angel investing declined 8.3% in 2009 to $17.6 billion, a drop that came on the heels of a 26.2% falloff in 2008. Because deals were slightly smaller in size last year, however, there was actually a 3% increase in the total number of firms that got financing.

Time to be creative and innovative in approaching business opportunities. There are great opportunities everywhere, now go seize them. (and do it with less!)

via In Search of Capital: The Outlook for Start-ups in 2010 – Knowledge@Wharton.


One thought on “Outlook for Start-ups | Knowledge @ Wharton

  1. Pingback: Technology By Day » Outlook for Start-ups | Knowledge @ Wharton | Campus Entrepreneurship

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