Source: County Data Corp.
| San Jose's Most Popular Start-ups, 1996 |
| Type of business |
Number of start-ups |
| Restaurant |
129 |
| Automotive services and repair |
103 |
| Designer |
93 |
| Computer services and repair |
63 |
| Cleaning services (residential, commerical) |
60 |
| Computer systems design, consultants |
58 |
| Beauty salon |
56 |
| Consultant |
55 |
| Computer software |
54 |
| Automobile body repair and paint |
49 |
The software and hardware-related industries of California's Silicon Valley attract considerably more venture capital than any other region of the country. Does that venture money inspire a broader range of entrepreneurial energy? Last year, nearly 5,500 new enterprises--0.69 businesses per 100 people--opened their doors in San Jose alone.
Who's funding today's emerging businesses?
- More capital is invested by angel investors than by venture capitalists.
- For the past three years, small-cap stocks have been outperformed by large-cap stocks.
- Most businesses never use angel or venture funds, and they never go public. They go to the bank.
Annual Venture Investments
1991$3 billion1992$4 billion1993$5 billion1994$5 billion1995$7 billion1996$more than $10 billionSource: National Venture Capital Association
The Market for Initial Public Offerings
Number of IPOs19913951996564 Dollars raised1991$25 billion1996$24 billion Average offering price/share1991$11.431996$11.81 Health-related IPOs199128%199617% Issues whose stock priceswere cut in half by year-end19919 (2%)199649 (9%)Sources: "The Year in IPOs," Inc., May 1992;Securities Data Corp.
Last year saw far more new issues than 1991, but a considerably higher percentage of the 1996 IPOs recorded disappointing results during their early days of public trading.
Stock-Market Performance
Small-Cap Performance
(average market capitalization: $421 million)
Year-end price/ Investors' earnings ratio annual return199123.943.4%199224.516.5%199324.217.3%199419.4-3.3%199522.726.5%199624.514.8%
Large-Cap Performance
(average market capitalization: $6.1 billion)
Year-end price/ Investors' earnings ratio annual return199120.228.8%199221.3 5.9%199319.6 7.2%199416.0-2.4%199517.434.4%199620.719.9%Source: Frank Russell Co.
From 1991 through 1993, small-cap stocks performed and delivered healthier returns than the largest companies' stocks. Then the tables turned. Is that a trend?
Banks and Lending
Commercial loans$ in billionsoutstandingAs of December 31, 1991$459As of December 31, 1995$538As of December 31, 1996$565
Small-Business Loans Outstanding
(loans of less than $1 million)
$ in billionsNumber of loansAs of June 30, 1994$1384,322,000As of June 30, 1995$1514,769,000As of June 30, 1996$1635,257,000Source: Office of Financial Assistance,U.S. Small Business Administration.
Source: Office of Financial Assistance, U.S. Small Business Administration.
| Small Business Administration Loans, Guarantees, and Liquidation Assets ($ in millions) |
|
Total |
Current amount
outstanding |
Percentage outstanding |
| As of September 30, 1991 |
$15,653 |
$13,121 |
84% |
| As of September 30, 1992 |
$17,398 |
$14,872 |
85% |
| As of September 30, 1993 |
$19,746 |
$17,250 |
87% |
| As of September 30, 1994 |
$22,523 |
$20,037 |
89% |
| As of September 30, 1995 |
$26,141 |
$23,543 |
90% |
| As of September 30, 1996 |
$28,330 |
$25,709 |
91% |
Thanks to tighter lending criteria, SBA borrowers are getting better about staying up-to-date with their debt payments.
What new practices are being adopted?
- "Alternative" arrangements account for about 15% of the U.S. workforce.
- Job sharing is on the rise.
Telecommuters
People who have jobs in a corporate setting and work from home at least two to three days a month
19915.5 million19968.7 millionSources: Find/SVP; Joanne H. Pratt, "Myths and Realities of Working at Home: Characteristics of Homebased Business Owners and Telecommuters," Small Business Research Summary, U.S. Small Business Administration, Washington, D.C., 1993
Statistics show that telecommuters get more and faster promotions than their counterparts who report to the offi
