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Week of May 3 - May 7, 2004Welcome to the National Dialogue on Entrepreneurship and e-News, an electronic newsletter sponsored by the Kauffman Foundation of Kansas City for followers of the entrepreneurial economy. Through e-News, we bring you short summaries and analyses of various trends driving the innovation economy. Please feel free to share this with friends and colleagues. To subscribe, visit www.publicforuminstitute.org/nde/join/ Did you know that links to the day's entrepreneurship stories from across the nation and around the world are posted each weekday at www.publicforuminstitute.org/nde? Bookmark it and stay informed about the latest entrepreneurship news. |
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NOTE TO OUR READERS: Each June, we produce a “Summer Books” issue of NDE E-News. If you know of new books (published in late 2003 or early 2004) that would interest our readers, please send us an email with your recommendations. Your tips can be sent to nde@pfidc.org |
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A Mother’s Day Tribute What’s the most important key to success for an entrepreneur? A loving mom. That’s the main message from a new documentary about entrepreneurs that’s timed just right for Mother’s Day. The new film (by Mary Mazzio), Lemonade Stories, asks leading entrepreneurs to talk about their mothers and their influence on both business and on how entrepreneurs give back to their communities. Interviewed entrepreneurs include Richard Branson (Virgin), Russell Simmons (Def Jam), Kay Koplovitz (USA Networks), and Arthur Blank (Home Depot). The film will air in its entirety nationwide on Friday, May 7th at 9PM Eastern time on CNNfn. Segments of the film will be shown this week on CNN. And, don’t forget to call or visit Mom on May 9th! |
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Venture Capital Business Looking Up The venture capital (VC) business seems to be recovering after several years of decline in the aftermath of the 2000 technology industry downturn. Several new studies point to a more rosy scenario for VCs. A new National Venture Capital Association (NVCA) study of 2003 investments finds that the returns from venture investing rose rapidly in the 4th quarter of 2003. Over the course of the year, VC funds returned 8%, the first positive annual returns since 2000. Figures for the first quarter of 2004 are also out. These new data show that, despite improved profits, overall investing levels are holding relatively steady. In the first quarter of 2004, $4.6 billion was invested in 618 companies. These numbers show little change from the 4th quarter of 2003 when $4.9 billion was invested. The big change concerns the types of firms being backed. A clear trend away from early stage investing can be discerned. Thirty percent of 2004 investments went into more established later-stage firms; 26% of total VC investments backed later-stage firms in 2003. |
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Angel Investing Up Too! VC firms aren’t the only ones who seem to be enjoying better times. The angel capital market also seems to be reviving, according to a new survey by Jeffrey E. Sohl of the University of New Hampshire’s Center for Venture Research. The Center’s 2003 survey of angel investors finds a modest recovery as more than $18.3 billion was invested by individual angels and organized angel groups in 2003. This total is a slight increase from 2002’s total of $15.7 billion. The total volume of deals grew quite rapidly (rising by 16%) with angels backing more than 42,000 ventures last year. Overall, more than 220,000 individuals are active investors, and the typical deal brings together 4-5 angels to fund a venture. Angels still serve as a primary source for seed and early stage investing. They are also providing more post-seed funding, but entrepreneurs still face significant challenges in finding funds for this stage of a company’s growth. |
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More Good News: Small Business Optimism Up as Well Since we are sharing good news in this issue, let’s also share the results of the latest OPEN Small Business Network 2004 Semi-Annual Monitor from American Express. This semi-annual survey assesses small business optimism as well as plans for future hiring and expansion. The survey of 732 business owners finds that optimism is up as nearly three out of four (72%) see growth opportunities for their companies in the next six months. This number is up significantly from the 56% of business owners who expressed optimism in Spring 2003. The survey also asked small business owners to discuss the types of benefits provided to employees. An interesting result is that firms who plan to hire new workers offer richer benefits packages than those firms without plans for new hires. This result may be an indicator that growing businesses understand that being good to your employees is also good for the bottom line. |
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the National Dialogue on Entrepreneurship: Mark Marich, Editor - mark@pfidc.org |
