The New York Times is noting that there have been no VC funded IPOs in this second quarter of 2008, which appears to be the first time that has happened since 1978. I haven’t done enough research to suggest this is a huge anomaly but I think it is another mildly ominous happening in the world of US business economics. Last night on Charlie Rose a key guy a Llyods of London Insurance was suggesting that in his view the mortgage crisis here in the USA is not at all over, and also noted how business things are blooming and booming in Asia and India while they appear to be wilting here in the USA and Europe.
In my opinion the best we an hope for is a fairly soft landing as China, India, Vietnam, and other parts of the developing world take their (rightful) place as players in the global economy. We’ve had it pretty easy for the past 60 years after WWII reconstruction rescued many economies from post-war ruin. Unfortunately that beneficence has been long forgotten (and it helped our economy along anyway).
So tighten up that belt and start spending less, because business isn’t what it used to be and it’s not going to be back anytime soon – perhaps forever.
In my business, I’m seeing an overall downward trend in individuals seeking VC capital. Many are sticking with angels or “friends and family” money and aren’t even bothering with VC’s. At the same time, these entrepreneurs are cutting professional service providers and doing more of the grunt work themselves by using sites such as http://www.vcexperts.com and http://www.allbusiness.com .
If the song remains the same, which professional service providers do you think are going to take the biggest hits? Let’s see:
1) Attorneys: gotta have them to get the deal done, but the smaller firms are getting the deals now that attorneys can’t logically get business at $1k an hour.
2) Accountants: same as above unless you want the SEC and IRS breathing down your neck
3) Consultants: maybe. I’d say 75% of entrepreneurs are relying less upon strategic advisors than they were a year ago. You don’t need to pay $25,000 to figure out the whole consumer purchasing industry sucks
VC Experts.com offers online resources for entrepreneurs and professional service providers on the best practices and industry guidelines of Private Equity & Venture Capital fund raising.
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