4 Myths about Starting Up Your Own Business

June 10 2008 | 0 comment(s)

An interesting story on Market Watch talks about four myths for starting up your business, that shouldn't hold you back. Here is an excerpt of the story:

1. It takes a lot of money to finance a new business. Not true. The typical start-up only requires about $25,000 to get going.
2. Venture capitalists are a good place to go for start-up money. Not unless you start a computer or biotech company. Computer hardware and software, semiconductors, communication, and biotechnology account for 81% of all venture capital dollars and 72% of the companies that got VC money over the past 15 or so years. VCs only fund about 3,000 companies per year, and only about one quarter of those companies are in the seed or start-up stage. In fact, the odds that a start-up company will get VC money are about one in 4,000. 
3. Banks don't lend money to start-ups. Federal Reserve data shows that banks account for 16% of all the financing provided to companies that are 2 years old or younger.
4. The growth of a start-up depends more on an entrepreneur's talent than on the business he or she chooses. Sorry to deflate some egos here, but the industry you choose to start your company has a huge effect on the odds that it will grow. Over the past 20 years or so, about 4.2% of all start-ups in the computer and office-equipment industry made the Inc. 500 list of the fastest-growing private companies in the U.S.; 0.005% percent of start-ups in the hotel and motel industry and 0.007% of start-up eating and drinking establishments made the Inc. 500.
   

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