What is hopeful for our Economy right now? Tech start-ups
Posted By: robyn: October 10th, 2008After watching the stock market today, you can’t help but to feel a bit of panic. Although, it did recover quite a bit towards the end of the closing bell, regardless this year-to-date the market has dropped almost 40%.
Silicon Valley has never been a place to throw in the towel. Although VC firms like Sequoia Capital are ’sounding the alarm’ for what could be the worst economic downturn in years. However, when we think back to the 2000 dot com crash, not the same situation, but it certainly applies, what occurred was a reality check and it helped weed out the not-so-smart ideas and that was good. Years after 9/11, technology start-ups and innovations from existing companies like Apple helped pull the country back to life.
So, when all the news across Silicon Valley is that VC investment is falling off, investment money drying up, is this really the case? Not necessarily. You see, the cost of starting up a tech company has dropped tremendously. Whereas a few years ago it might have taken $1 million to launch a company, now it may cost $100,000. It will be easier for wealthy individuals, angel investors to fund companies.
Obviously, the country needs to make sure there is money to build new technologies and start companies. Yes, we do need $700 billion to make sure the economy is functioning. However, that’s about now, how about our future? A very small portion of that money could go a long way in creating breakthroughs and companies to renew the country. David Ewing Duncan, contributing editor for Condé Nast Portfolio, wrote a great article regarding this matter - Investing In Our Future - and that’s what we need to do.
