New York SBDC Research Network

The Small Business Advocate – October 2011 ; Vol: 30 , No: 8 The October 2011 issue of The Small Business Advocate directs attention to one of the top issues facing small businesses: access to capital. Advocacy’s September symposium, The Small Business Capital Crunch: Debt and Equity, receives feature coverage, along with three new finance publications. The issue also contains updates to proposed regulations from the Departments of Labor and Treasury, and coverage of the Advocacy’s participation in the Congressional Black Caucus. In this Issue Advocacy Symposium Probes the Capital Crunch, 1 Symposium Coverage, 4–7 Chief Counsel Participates in Congressional Black Caucus, 8 Social Media Update, 12 Message from the Chief Counsel Access to Capital Dominates Advocacy’s September Agenda, 3 Research Notes Three New Advocacy Finance Publications, 2 Developments in Women-Owned Businesses, 1997–2007, 11 Regulatory News Advocacy Recommends OSHA Burden Reduction,...

Here's an interesting article from a researcher who also founded two different tech firms. He argues that, in certain industries, getting venture capital funding for startup firms isn't all that it's cracked up to be. Even if the funding helps a business achieve its self-identified funding goal, there's pressure inherent in receiving the money - pressure to hire an A-list (and expensive) staff, and pressure to produce *right now* (in lieu of pursuing long-term growth). He argues that there's virtue in being undercapitalized, in that it forces a company's management team to be that much more creative (and honest) in what it needs to kick-start growth. I cite this article because, as I've written recently, we've seen a bump in the number of requests seeking venture capital firms for our clients. There are certainly merits in seeking out this type of financing. However, obvious as it might sound, have your clients be careful what they wish for.