Wednesday, July 10, 2002

Perilous Times for Entrepreneurs

The media, Congress and The White House are all lathered up about the corporate excesses in the news. Accounting scandals, egregious compensation and cooked books will most likely define this recent period. It will be the coda to the dot-com boom and bust. History will have a glossy sound byte for describing our gilded age.

This is unfortunate. The broad brush covers nuance and the other side of the coin. Not only is history the loser, but so are contemporary policy makers and their constituents who may make decisions which negatively impact the entrepreneurial tug and pull that is our nation's engine for greatness. Today, that engine is running on near empty.

The economic travails and market shenanigans of the past two years have created a lack of capital for entrepreneurs. Angel investors have had their wings clipped as their last round of bets failed. They have to wait for a rebound and pray. Professional venture investors are venturesome in name only. They are struggling to maintain a happy face and collect their management fees. The public markets are moribund with exceptions that are akin to hen's teeth. Overlaying this are anxieties that naturally flow from the reported excesses of big brand name companies (who will be next?) and post September 11 (what will be next?).

Meanwhile, lost in shuffle and probably lost to history are thousands of small enterprises struggling to stay alive. For them the capital markets have all but dried up. They have great ideas. They are driven by committed, ethical men and women who believe in their companies and their products and want to make a difference in the world. They embody the spirit and solid values that have made America great.

They include the vaccine company in Montana with technology to cure life-threatening disease, the database company in Florida that analyzes all publicly traded stocks in the world, and the firewall company in Seattle the blocks hackers from your home PC. In each of these and thousands of other companies people have gone months without pay or pay so modest as to qualify for food stamps. They have been forced to live with relatives, have lost marriages and been evicted from offices and apartments. They are struggling to survive in an environment that includes the most difficult capital market any of us can remember. Unfortunately, some have had to give up, for the sake of their health, their sanity and the well being of their families. Our nation and our world are less well off as a result. When our entrepreneurial engine runs out of gas our global leadership position is impaired.

My plea to the media, the moneychangers and the policy makers is to pay attention to the entrepreneurs. The important role they play should not be ignored in the face of momentary distress. Hopefully, they will continue to scrap and struggle and the best will prevail and realize the fruits of their labor.