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Week of August 16 - August 20, 2004Welcome to the National Dialogue on Entrepreneurship, an initiative of the Public Forum Institute made possible by a grant from the Kauffman Foundation of Kansas City. Through e-News, we bring you short summaries and analyses of various trends driving the innovation economy. Current and archived issues of e-News are available online at www.publicforuminstitute.org/nde/news/enews.htm. To subscribe, visit www.publicforuminstitute.org/nde/join/ 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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A Note To Our Readers While Congress is in recess and the primary movers-and-shakers left in Washington are the tourists, NDE e-News is taking off the rest of August. Look for us again on September 13 and enjoy your summer. |
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What’s on the Mind of Young Entrepreneurs? A new survey of members of the Young Entrepreneurs Organization (YEO) offers some interesting insights into the thinking of owners of some of the US’s newest and fastest growing businesses. YEO members are optimistic about the economy, and they’re acting on this optimism. More than 75% have hired in the past few months, and 84% plan to hire by the end of the year. Not surprisingly, 84% have identified growth as their firm’s top near term priority. When asked to identify the top growth challenge facing their companies, 31% said the lack of qualified workers. Other concerns included the overall state of the economy (29%) and access to adequate capital (24%). Other interesting results include the finding that 1/3 devote more than 40 hours per year to supporting charities or philanthropic activities. |
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Pay Rates for Start-up CEOs Average pay for the CEOs of start-up information technology companies has not grown much in the past few years, but it’s still a pretty good gig. A new survey from J. Robert Scott (on behalf of Ernst & Young and Wilmer, Cutler, Pickering Hale & Dorr), an executive search firm, finds that CEO compensation in IT start-ups rose only 1.9% between 2002 and 2003. Yet, the overall average compensation of $225,000 isn’t too shabby even with long hours and the many headaches of a start-up. Average CEO pay in California is highest ($279,000) and it is lowest in the mid-Atlantic ($219,000). Bonuses are becoming a very important part of CEO compensation, totaling 22% of base salary. Overall, the survey’s authors surmise that the absence of big pay hikes is a sign of moderation among IT CEOs. Instead of returning to the dot-com era of high pay and benefits, CEOs are more focused on preserving cash and building their companies in a sustainable manner. |
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Defense Contracts for Small Business 2003 was a good year to be a small business owner serving the US Department of Defense (DoD) according to the Pentagon’s annual report titled
Procurement from Small and Other Business Firms. Overall, DoD contract awards to small business rose $9 billion in fiscal year 2003, reaching a total of $42 billion. More than 22% of all DoD contracts now go to small businesses. Small firms provide DoD with everything from food to computers to weapons components. DoD officials attribute FY2003’s contracting jump to an increase in spending on ships, services, construction, and other commercial items. |
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New Venture Capital Numbers The National Venture Capital Association (NVCA) has been busy with the recent release of lots of new statistics on how the venture capital (VC) industry fared in the 2nd quarter of 2004. All of the data point to continued good news in the VC world. First, VC investments in Q2 2004 reached $5.6 billion, continuing the growth pattern of the past two years. VC firms backed 761 companies—with roughly 30% of them in the early growth stage---during this period. Fundraising by VC funds has been stable, with much of the Q2 2004 fundraising focused on new funds that plan to back early stage companies. Finally, VCs may soon be enjoying the opportunity to exit from some of their earlier investments. Merger and acquisition activity grew again in Q2 2004, marking the fifth straight quarter of growth in the number of firms acquired. |
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