GreenCards, GreenBacks, Startups & Bailout

Thomas Friedman finds the US to be still bursting with innovators looking for capital. He points out that companies like Intel, were started in recessions, when necessity makes innovators even more inventive and risk-takers even more daring. He advocates more government targeted investments in startups. Friedman emphasises investment in the future (startups), not sustaining past failures through bailouts). Startups created with a focus and in time can become huge success reckons Mr. Friedman. In an earlier column, Mr.Friedman pointed out how more immigration could provide a booster to the US economy. I have to agree with Friedman when he points out that money at the hands of those capable of focussed efforts towards innovating would fetch better results and create more jobs. In this fast changing internet centric world, there a multitude of fresh opportunities ready to be tapped by a new class of entrepreneurs. Therein lies the opportunity to ideate, start ventures, give birth to new solutions/products, create jobs and generate wealth. In general, I find that of late, some forward looking emerging nations are able to make their investments in a more focused and productive way. Fred Wilson feels that government need not help the VC’s –they are already flooded with capital. A recent Goldman Sachs report notes that VC investments were down 8% in 2008 to $28 billion, with investments in Tech down 16% to $11 billion. Tech again attracted the most VC money at 39% of the total in 2008. To be fair to the VC community, maximum investments is going towards the cleantech space but as Friedman points out tax credit concerns almost crashed the cleantech industry last quarter. I like Don Dodge’s view that VC’s need to invest more in services and Sramana’s pioneering view that angels should also be allowed to create pools of tax-free capital for investing in start-ups–especially in unknown, unproven entrepreneurs who often don’t have access to venture capital and that it is not so different from a tax-free account set aside for a child’s education.