Most Entrepreneurs Forced to Crack Open Their Piggy Banks
The vast majority of start-up capital comes from self-financing and friends and family, according to new research.
From: Inc.com |By: Angus Loten
Entrepreneurs are their own best investors, providing more than 60 percent of the start-up capital required to get their businesses off the ground, according to a new international study.Surprisingly, the rest comes from family, friends, and neighbors, according to the 2006 Global Entrepreneurship Monitor Finance report, an annual look at the state of entrepreneurship around the world released Monday by Babson College and London Business School. Less than one in 10,000 start-ups rely on classic venture capital, the study found.
Among the 42 nations covered in the study, more than 200 million informal investors provided entrepreneurs with a total of $600 billion to start businesses last year, compared to just $37.3 billion in classic venture capital. On average, the costs of launching a new business came to $65,000.
According to William Bygrave, a Babson professor who wrote the report, the findings show that far too much emphasis is placed on the role of venture capital in creating new businesses, and not enough on informal investors or entrepreneurs themselves.
For the entire article go to Inc.com.
Corra has always believed in the axiom that if you are spending money, then spend a little more for better quality. It will save you money in the long run.
Well, this applies to your recruitment plans, especially when you are recruiting as a start up. Take your time, screen carefully, and be willing to spend the money for quality people. If you are short on the bucks, then offer stock, incentives, whatever. Just get the best. By doing so, you won’t have any guarantees your business venture will be successful, but you will increase the odds in your favor.
This is so important, especially in our modern world where far too many candidates are anything but literate. Many can’t add, yet alone do advance math. Sure there are the techies and the advanced management teams with all the desirable skill sets. But can they write a decent letter? Do they understand people well enough to be engaging on the phone? Yes, no…maybe.
That is why it is so important to run a thorough background screening on anyone you are thinking of hiring. Besides the criminal background check, you should be conducting education verification and employment verification checks as well. Don’t just make sure they are who they say they are. Make sure they can do what they say the can do.
Check them out before you hire.
