Startups

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

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 […]

By Deanna Pogorelc on May 06, 2013 7:00 am

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.

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]