Tuesday, January 13, 2009

"Startups we don't Need"?


In a recent article entitled "The Startups we don't Need" Shane argues intriguingly that policies that assist the formation of small businesses are generally misguided.

He writes, "The typical start-up is a company capitalized with about $25,000 of the founder’s savings that operates in retail or personal services. Odds are pretty good that it is a home-based business, and the founder aspires to generate around $100,000 in revenue in five years."

His argument is that this type of business is not one that is going to add sufficiently to the community to offset the costs of the programs. Instead he argues that we need to "think like venture capitalists and concentrate time and money on extraordinary entrepreneurs, and to worry less about the typical ones."

It is an intriguing argument - are we making a bad policy decision when we try to help small businesses? Here at the Center for Business Development, we take a two pronged approach. For those businesses which show high growth potential, we offer space and services as resident tenants. For businesses that are smaller and or in retail or personal services, we offer our virtual tenancy, which allows them to meet with us and discuss their business and develop a good plan of action.

Read the article, then come back and comment: "What do you think?"

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