Great Business Plans Blog

Conflicting Stories About Health of Venture Capital

Thursday, 24 June 2010 00:00 |

Written by Jim D

(1 vote)

faucet-trickle-sml On Sunday, The San Diego Union Tribune ran an article lamenting that venture capital firms "are feeling pretty anemic these days." The article discusses the ecosystem where small companies seek venture capital to grow their businesses. Venture capital companies seek to have their portfolio companies go public or be acquired. When that doesn't happen, the VC's can't return money to their investors. To complete the lock-up, those who fund the venture capital firms, stop investing. Thus, small companies are having a difficult time getting venture capital funding. Sad news for an economy so dependent on the success of small businesses.

If it weren't for the fact that the misery trickles down, many entrepreneurs would be without compassion or even amused at the idea that venture capital firms are having a hard time raising money. The irony is inescapable. However, since we are all living in the same ecosystem, we comment but dare not laugh. There is however a silver lining.

In a separate article, only 4 days later, CNN Money reports that "The IPO Market Roars Back." The article reports that "In the last six months, 20 venture capital-backed companies have had IPOs. That's eight more than went public in all of 2009, according to the National Venture Capital Association." Twice that many are have IPO filings in the works.

Even the smallest of entrepreneurs should be celebrating this news. The success of the IPO markets will eventually bring new money to venture capital firms, which will make venture capital funding for your business a viable strategy. The dollars that are starting to pour into IPO's will soon trickle into startups.

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Government Help for Small Business? Don't hold your breath!

Saturday, 12 June 2010 04:30 |

Written by Jim D

(1 vote)

sba-government-money-sml This week there was more news about what the federal government is going to do to help small business owners. I don’t think they even understand the problem.

First, by defining ‘small business’ as any business with fewer than 500 employees, they are missing the mark completely. Over 99% of businesses in the US have fewer than 500 employees! Meanwhile, about 20% of US workers are employed by firms with fewer than 20 employees. Those are the kind of ‘small businesses’ our government should be trying to help.

When most people hear about government guaranteed SBA loans for small business, they probably think that the business owner is the beneficiary of the government guarantee. Wrong. The guarantee is from the government to the bank that made the loan. The small business guy gets nothing out of the deal. As a small business owner, you can be guaranteed that they will come after you for every dime you borrow unless and until the loan is repaid. There will be no help for you, the small business owner, from the federal government.

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The Six Startup Rules for Launching an Internet Business

Thursday, 10 June 2010 21:24 |

Written by Jim D

(0 votes)

This week I was honored to be featured as a guest blogger on Keller Hawthorne's blog, FreshEVenture.com. If you don't know Keller's work, you're missing out! Visit the site to read my article, The Six Startup Rules for Launching an Internet Business. While you're there browse around and see Keller's numerous insightful postings. If you're serious about starting an online business, she's one to watch!

Jim DeLapa, GBP

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Sustainable Advantage - Every VC's "Gotcha" Question

Thursday, 13 May 2010 00:00 |

Written by Jim D

(1 vote)

business-plan-sustainable-advantage-sml

Today I had lunch with a friend who has been part of several startups and has done quite well. He even took one of them public. He's at it again--in the process of raising money for another new business.

We started talking about the usual questions angel investors and venture capitalists ask all founders. One of the favorites is "What is your sustainable advantage?" In other words, what makes you different today and how will you protect that difference so that nobody else can ever catch up?

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