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It’s a good time to be a startup, according to early-stage entrepreneurs

May 6, 2013 7:00 am by | 0 Comments

Kauffman confidence training

Entrepreneurs are feeling as good as they have in over a year about the prospects for their early-stage companies.

According to the Startup Confidence Index for Q1 2013, 84 percent of entrepreneurs said they are confident their profitability would increase within the next year — the highest confidence level they’ve shown since the Ewing Marion Kauffman Foundation and LegalZoom launched its quarterly survey early last year.

I have to wonder if young companies in the healthcare and life science industries would fall in line with that trend, or demonstrate more reserved confidence in their growth over the next year. Even well-established medical device companies, for one,  are already reporting weaker earnings this year. And for growing startups, there’s the extra burden of securing growth capital.

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Although venture capitalists have expressed a boost in confidence too, they’re putting less of their money into life science companies, and especially early-stage ones. But, accelerators and incubators for the earliest stage companies are popping up across the country. And, acquisition activity is up, with more deal volume in the fourth quarter of last year, and 40 percent of providers, insurance companies and life science companies in a recent KPMG survey saying they would do more dealmaking this year.

But back to that Startup Confidence Index. Despite entrepreneurs’ good feelings about their own companies, much fewer see the overall economy growing in the same way. Just 29 percent said they expected the economy to improve over the next year, and the number of entrepreneurs who said they planned to hire in the next year dropped from last quarter to 32 percent.

Kauffman and LegalZoom surveyed 1,650 entrepreneurs who formed a company between February 2012 and February 2013.

[Graph from the Startup Confidence Index]

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Deanna Pogorelc

By Deanna Pogorelc MedCity News

Deanna Pogorelc is a Cleveland-based reporter who writes obsessively about life science startups across the country, looking to technology transfer offices, startup incubators and investment funds to see what’s next in healthcare. She has a bachelor’s degree in journalism from Ball State University and previously covered business and education for a northeast Indiana newspaper.
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