Monday, December 1, 2008
The Entrepreneur and the Credit Markets
Over the Thanksgiving holiday, we were in Santa Fe helping one of our daughters pack for a cross-country move. When I wasn’t buying boxes, packing them and then waiting in line to ship them, I had the chance to meet with a friend in the venture capital business. Listening to him talk about the difficulties that some of his portfolio companies were enduring thanks to the mess in the credit markets, spoke more clearly to me than hours of Congressional hearings. When the credit markets break (and I think we can now safely say that they are indeed “broke”), while it hurts all companies in the economic food-chain, it really hurts the entrepreneurs who are trying to start, grow or even sell their companies. The November 28 Wall Street Journal carried an article by Pui-Wing Tam that discusses the problems facing entrepreneurs and VCs alike. The article addresses entrepreneurial companies, but our current economic situation also hurts companies that don’t even consider themselves entrepreneurs. While visiting in Santa Fe, I noticed a number of small businesses that had been around for ten or more years, shutting their doors because of the slowdown in consumer spending. While our representatives in Washington deal with the banks, insurance companies and the automobile giants, the engine of growth in this country---the entrepreneur---is being ignored. It may be up to us to save ourselves…and our country. More about that on another post.