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Current trends and legislation affecting small business.
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Venture capitalists show signs of retreating from their traditional mission: nurturing start-ups. A survey of VCs by Grant Thornton found that 48% were interested in start-up investments in the 1980s, while only 25% would seek them in the '90s. And Technologic Partners reports that venture seed capital investments involving computer-related business fell 10% in dollar volume from 1988 to 1989. If the initial public offering market doesn't improve, Frank Florence of Dataquest thinks the number of venture firms will shrink 30% to 40% in the next few years.

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"Before and after" sales pitches take on new meaning as more small companies start using computer-imaging technology. In Murphysboro, Ill., for example, Art of Hair beauty salon previews new hairstyles for customers with its $20,000 computer and camera system. Similarly, some Nutri/ System franchisees show prospects how they would look slim. The systems aren't just for portraits. Larsen & Ludwig, a Pittsburgh design firm, says it increased sales by 15% with its $75,000 computer animation system, which walks clients through planned buildings.

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Networking is going high tech at business incubators. More than 100 are set to be linked by electronic mail through BatorLink, a system designed by Coopers & Lybrand with the National Business Incubation Association. The idea: if start-ups benefit from networking with other tenant companies, why not expand the concept?

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Do your employees know the hazards of cleaning fluid? If not, you could be violating OSHA regulations. When OSHA set up standards for informing workers about hazardous substances several years ago, the Office of Management and Budget struck down a few as overly burdensome. One example: OSHA required special training and forms for employees who use hazardous consumer products more than an ordinary consumer -- for instance, janitors who use cleansers all day. But the Supreme Court recently decided OMB has no power over what OSHA makes companies tell workers -- so the rules stand.

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The National Association of Securities Dealers hopes to make it tougher for small public companies to join -- or stay on -- NASDAQ. NASD has asked the SEC to approve tighter listing requirements, including assets of $4 million (today $2 million is needed) and a stock bid of at least $3 a share (there is no current minimum). To stay in the system, companies now must keep $750,000 in assets; the proposal is for $2 million and a minimum bid of $1. NASD's Enno Hobbing thinks 400 or 500 of the 4,900 members currently couldn't meet these maintenance standards. NASD plans an electronic bulletin board for such stocks.

-- Martha E. Mangelsdorf

Last updated: Jul 1, 1990




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