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Economic woes and the startup.

The Startup Lawyer is asking how the current economic downturn will affect startups? There are a number of ways to look at this, as I stated in The Startup Lawyer’s comments. PC’s are ubiquitous at this point, so those whose livelihoods rely on services and not goods may be in a position to open a company. However, those looking for venture capital may find there is none, or maybe there is, at least here in Wisconsin. An economy in this kind of flux could arguably reward those who can use technology in the most effective manner. Alternatively, it is certainly possible that people will not form startups. I’m not an economist, but I am an entrepreneur and I surely believe that, even when times are bad, startups can continue to sprout.

This entry was posted on Tuesday, February 12th, 2008 at 3:56 am and is filed under Business Formation, Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “Economic woes and the startup.”

  1. Rush Nigut Says:
    February 12th, 2008 at 4:30 am

    Chris,

    In Iowa, I am told there is more money for venture capital than good companies. I am also seeing many who are unafraid to start-up in this environment including real estate development because they believe the prices are so good.

  2. Chris Moander Says:
    February 12th, 2008 at 9:03 pm

    That is really interesting. I assume the development is commercial and not residential. The capital would have to be substantial as I also assume most real estate purchased for development in Iowa is bought from farms, especially in and around Des Moines, and farmland can command a hefty price unless the farmer is in financial trouble. Then again, it’s been seven years since I lived in Iowa…so things may have changed.

    I guess things in the Midwest are looking better than elsewhere?

  3. Rush Nigut Says:
    February 15th, 2008 at 2:26 am

    You are correct about farmland. Farmers are getting a hefty premium for ground although like everything else it can’t go straight up. Actually what I am seeing is that several developers are in trouble and it has made prices attractive for new players.

    The Des Moines and Iowa markets are probably a little more stable than most but there is no question the real estate downturn has caused some problems here with some major developers.

  4. Ryan Roberts Says:
    March 5th, 2008 at 7:44 pm

    Down here in Texas, the bankers I know aren’t seeing a slowdown in real estate projects. They are just having a harder time getting projects through the loan committee. Of course they are worried about the downturn, but I have a suspicion that some of these banks are low on deposits.

    So if the banks aren’t lending the money for these projects, I expect there will be more of a trend towards private investment.

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