Archive | August, 2007

Will a Debt Crunch Drive Smart Minds Away from VC, Entrepreneurship?

2 Aug

Roger McNamee The stumbling of the debt market in the United States and internationally within the last couple weeks is an issue of concern not just for banks and big businesses, but for entrepreneurs and venture capitalists as well.

Roger McNamee, the Managing Director and co-founder of Elevation Partners and author of The New Normal, spoke yesterday at the Stanford Summit about the “Long Shadow of Debt” facing Silicon Valley.

If you’re an entrepreneur, do the things you need to make the company more valuable — and be prepared to do it for awhile… We are going to vaporize a ton of private equity, venture capital, and public market capital, and when that’s done, we’re going to have a bull market like no one has ever seen.

He did not deny, however, that these will be hard times for entrepreneurs, who will have to cope with a tightening of the purse strings of venture capitalists, and reduced opportunity of an exit by being acquired by a private equity shop.

As Epicenter paraphrases from McNamee, “The lesson? Hard times are coming as the amount of liquidity available dries up. But it won’t disappear forever, because the underlying opportunities are still there.” McNamee continues, “If you’re an entrepreneur, don’t run out of money — and be prepared to do it for a long time. But the market potential is huge. I think this is a great time to be an entrepreneur.”

The question that leaves in my mind, is how this emerging shift should shape the decisions of someone who is considering entering the ventures world. Will opportunities be fewer and further between? Will that drive smart minds back into bigger business and industry?

That’s It. Next Stop: Canada

1 Aug

Vietnam War - Viet Cong Base after US AttackIt turns out all those people who said they were going to “move to Canada” if George Bush was elected for a second term weren’t kidding. ABC news reported yesterday that the number of Americans moving to Canada reached a 30 year high in 2006.

The number of U.S. citizens who moved to Canada last year hit a 30-year high, with a 20 percent increase over the previous year and almost double the number who moved in 2000.

In 2006, 10,942 Americans went to Canada, compared with 9,262 in 2005 and 5,828 in 2000, according to a survey by the Association for Canadian Studies.

Paul Kedrosky highlighted this article out today on his blog, but failed to point out one obvious connection: what was happening 30 years ago? The Vietnam war had justed reached its close, and an entire generation of Americans was fed up with its government and a war they deemed as unnecessary and detrimental to our society. Sound familiar?

It is, of course, negligent to fail to mention that before jumping to the conclusion that whole swaths of the country are moving north, remember that the border still booms in the opposite direction:

Of course, those numbers are still outweighed by the number of Canadians going the other way. Yet, that imbalance is shrinking. Last year, 23,913 Canadians moved to the United States, a significant decrease from 29,930 in 2005.