Publisher: Florida Chamber of Commerce
Date: January 28, 2013
The small business community is often characterized as the “engine of economic growth;” an engine responsible for significant job and wealth creation in our local communities. Yet this engine has continued to struggle in the wake of the Great Recession. Political uncertainty and a bearish business climate continue to hamper the success of small businesses, especially in Florida. According to the Florida Chamber of Commerce’s Small Business Survey conducted in December 2012, only 17.24 percent of small businesses surveyed who sought financing in the previous six months were able to acquire it. In addition 49 percent of small businesses surveyed stated obtaining financing within the next six months will be more difficult. With the increased regulatory pressures facing lending institutions, and the potential for taxes to erode profit opportunities, this negative sentiment seems warranted.
Recent venture capital data published by PricewaterhouseCoopers Money Tree suggest that while investments for start up businesses are increasing, these investments are happening outside of Florida. Venture capital is defined as capital invested in projects with significantly higher risk of default, typical of new and expanding businesses. Such capital may be the difference between starting up a new business, and not starting at all. With venture capital funds equaling approximately $28,576,000 in the third quarter of 2012, Florida had the 22nd highest amount of venture capital funds in the nation. A possible explanation for Florida’s mediocre ranking could be due to the disparity in how venture capital funds were distributed. Investments into software technology and biotechnology – both high tech industries – have comprised approximately 43 percent of all venture capital investments since 2011. Continued focus on improving Florida’s innovation sector and creating STEM jobs could provide venture capital investors the incentive to invest in Florida’s small business community. Read more here.