Comments on: Young Companies Need a Bailout, Too.

By: What Would Dad Say » What Happens When People Who Don’t Do, Try Anyway.

Mon, 23 Feb 2009 19:20:29 +0000

[...] could grow a business faster than most of the other insane, stupid plans. The post was titled Young Companies Need a Bailout, Too. Here is it, again: Want to stimulate the [...]

By: wwds

wwds — Tue, 17 Feb 2009 19:29:05 +0000

Eric,

You have hit on a big vacuum in the marketplace. Funding for small startups is now dependent on angel investors, who are now seeing a lot of opportunities in the normal market. But I sure agree…funding startups generates lots of activities, including hiring. Great comment, I appreciate it.

By: Eric Pederson

Eric Pederson — Tue, 17 Feb 2009 18:24:46 +0000

I’ve had similar thoughts. Isn’t the best way to bootstrap an economy to fund small entrepreneurial efforts?

Aside from the economy there is a real gap in funding for small innovative business below the funding radar of VC. E.g. I have a big idea which could be bootstrapped for $50K and put into take over the world mode for $1M, but this is far too little money to interest a VC.

These kind of endeavors will be harder to fund than ever with the economy in its current state, delaying the development of new business and innovation that could have a huge multiplier in stimulating the economy.

I suppose the rub is that the Government wants money that will be spent immediately upon passing legislation, and the prospect of funding small businesses would require an application program and months (best case) of delay before the businesses are funded, then further months or longer before the money is spent.

Still, for the medium and long term, funding small innovative business is a great investment for our society. We should do this.

-EP

By: wwds

wwds — Fri, 06 Feb 2009 17:06:56 +0000

Thanks Tim.
Chris—I was being slightly humorous here, of course, and I know that what sounds so good from the pulpit often gets screwed up out in the pews. From 40,000 feet, in other words, every idea seems to make sense. The devil, as always, is the details.
I am on a bit of rampage because here in MN our employment agency not only runs a state run job board, evidently because NONE of the other job boards are doing their job!!, but now has branched out so that beaucrats are teaching entrepreneurship. I said it would be like me coaching in the NFL because I watch it on TV.

By: Chris Russell

Chris Russell — Fri, 06 Feb 2009 17:00:10 +0000

I generally agree also GL, problem is there’s no way to manage this kind of initiative. Too many will try and ‘game’ the system. I think it would take too long to get the money anyway. By that time we’ll be in 2010.

But they should look at a way to fund the best and brightest among startups in some fashion.

By: Tim

Tim — Fri, 06 Feb 2009 14:22:57 +0000

This is why the current “stimulus package” and last fall’s “bailout” are ridiculous. They may be well-intentioned, but the money is getting into the hands of the wrong people.

Put it in the hands of proven entrepreneurs–they will create jobs, innovate, and ultimately bring the greatest ROI that the government can hope for.

One of the better ideas I’ve heard, GL.