What Today’s Economic Climate Means For Founders

Here and there you will hear the discussion about what is happening on Wall Street and what it means for founders of startup companies.  Most people are thinking about whether the current economic climate will have an adverse impact on investment in startups.  For some it will.  Many of the ones who will be adversely include founders on the lookout for angel and seek funding right now. 

Founders that I’ve talked to have not had as much luck as they had expected in their initial fundraising efforts recently.  Angel investors who had very deep pockets a few months ago have been less willing to part with their funds.  This is due in part to the impact that the greater market is having on their stock portfolios.  The savvy founder will take this into account and start thinking about looking for angel investors with deeper pockets or turning to venture capital firms.  The VC firms are still out looking for good investments.

Others who are in startups that have already received funding are in a different position right now.  The ones with business models tied to consumer spending are seeing the market tighten up a bit.  Not entirely, just a bit.  Many of these are looking to the new year for things to pick up. 

While all of this is going on, there are a lot of deals to be had for those who are in the right position to take advantage of them.  Real estate is abundant and cheap right now.  If you are looking for an office space it shouldn’t be that hard to find a deal.  Some of it is out there for the taking on Craigslist, but other space is quitely being marketed.  At least one very large space is available in downtown Washington, DC that I know of.  There is plenty more out in the suburbs.  My inbox has had a higher than normal level of “networking” emails from corporate real estate brokers which supports this theory.   

The real estate market isn’t the only place to keep your eyes on.  Washington, DC’s tech sector is more insulated than many others from economic fluctuations.  That means that if you look around you might just find that people in other markets around the country are having a harder time finding jobs.  This is a great opportunity for companies who have been having a tough time hiring.  If you have been looking for an MBA to lend a hand, now might be a good time to talk to your local business school.