As a young entrepreneur, do you find it harder to get credit during tough times?
Hall: It is not as a young entrepreneur, but rather as a rapidly-growing, highly leveraged business that is making it difficult for us to obtain credit.
Van Etten: I don't believe so. As long as you have a sound business you are on an equal playing field as other small businesses. They may be lending less to other small businesses, but it is based on the market rather than my age.
Soliman: I think it will be very hard for a young entrepreneur to obtain credit in today's market. When we first started in 2004, we had to go to eight different banks before we got a loan on our first truck. We kept getting turned down because it was too "risky" to lend money to a couple of 22-year-olds. Back then, the credit crunch was nothing like it is today. So a young entrepreneur will have to be creative when obtaining financing.
Chambers: Definitely. I still haven't been able to get anything but very basic credit, and I've recently seen requirements for loans and other growth capital increasing in scope and complexity. As for investment, the last month has been a rollercoaster with investors, but I'm also seeing the appetite for angel investments increasing as brick and mortar investments actually start to look safe compared to the stock markets. This is a good thing.
Goldman: We are very fortunate that we have not required additional capital during this time. Our financial management team has been doing a great job controlling our expenses.
Mullenweg: Nope.
Do you think younger business owners are able to take bigger risks during an economic slump?
Hall: Yes, although some younger business owners, myself included, have not had that experience yet.
Van Etten: No, I don't. Younger business owners must be very careful to run a sound business that manages their cash flow. They have less equity built up than more established businesses to take on these risks.
Soliman: I think young business owners can definitely take on more risk. My business partner and I are not married and we don't have any children. This allowed us to roll the dice more without having to worry about how our decisions would affect our family. It would have been very difficult for us to invest the $250,000 back in the business for our national expansion if we had mortgages or kids' tuitions to worry about.
Chambers: I think younger business owners have the mentality that they've already risked a lot. I personally feel like if I can soldier on, and grow, during this time, then we'll be one more step ahead when the economy is starting to look healthier again. I don't want to be foolish, but I do think it's important not to get paralyzed by all the fear that's out there, and perhaps my youth helps me push ahead.
Goldman: To be successful, business owners will always have to take risks. The goal in any type of economy is to do as much due diligence as possible before taking on a new project or venture. However, any business owner should be able to recognize and seize opportunity when it presents itself.
Mullenweg: I don't think it's about taking more risk or not, it's about setting up the business to be sustainable even through an economic slowdown and use the cycle to pick up great people, customers, and assets at bargain prices.
Overall, what do you think should be done to help turn the economy around?
Hall: Invest in the solution, not the problem. The problem is our dependence on oil. "Drill, baby, drill" is not the mantra of change and progress. If they want to drill, fine, go ahead. But besides the fact that it may be a bad environmental move, and the fact that it will not really make any material difference, it is distracting us from spending time on real solutions.
Van Etten: Historically, the market has always corrected itself. I feel very uncomfortable with the government picking and choosing what companies they bail out. The government and Federal Reserve must continue to make a business-friendly environment with lower taxes and other pro-growth policies. At the same time we must learn from this incident. The way companies will learn is by not getting get bailed out for making bad decisions. This country became great through capitalism and the free market. Over-regulation will hurt us in the long term.
Soliman: Over the past decade, the United States has seen a diminishing middle class. What the big companies and politicians need to realize is that the middle class is the foundation of this great country. "Trickle Down" economics does not work. It's time to put policies in place to protect and stimulate the hard working people of this country.
Chambers: If I knew that answer, I'd be helping Paulson! While I certainly don't want to see the U.S. in an extended recession, I do want those who have participated in creating this environment to learn sufficiently from their mistakes, so I hope we're not too quick to bail everyone out.
Goldman: There are many things that need to change for this economy to turn around. I don't have the answers. I trust in our Treasury and our Federal Reserve to get us out of this mess.
Mullenweg: I think we should stop the bailouts to avoid creating a moral hazard that will engender worse market corrections in the future. It's best to take our hits now and build a solid foundation for the next 100 years of growth. American entrepreneurs are just as smart and hard-working as they were two months ago and we can grow our way out of this slump.
