Market turmoil and it’s affect on Angel Investing and Startups

April 16 2009 No Commented

The Seattle PI posts an article posing the question whether the market conditions will negatively affect angel investing.

Investors are likely to get more cautious as the market suffers since they are seeing their investments in the market decline. However, regardless of the economy, it is never a bad time to start a company. Markets are cyclical and it is unlikely you will achieve great success within a short time frame. There is a good chance that once things get going for your company, the markets will have shown some improvement. (I am not trying to predict the markets here, but throughout history after every down turn, there is at least some sort of up turn.)

Inc Magazine had an article a few months ago about this topic – Starting Up in a Down Economy. They mention several reasons for why a down market is a good time to start:

  • If your product/service offers a cheaper alternative, it could be easier to sign up customers looking to save money
  • With layoffs occurring, you have access to good talent.
  • You are likely able to cut down on expenses by getting discounts from vendors since they may be struggling
  • So market conditions should not deter entrepreneurs from making the decision to start a company. And even though some Angel Investors may be a but cautious, there are plenty of others that are always looking for good companies regardless of market conditions.

    Read the original article here.