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Capital, Talent Constraints Limit Startups

By Dennis McCafferty on 2010-06-14


SVB Financial Group, the parent company of Silicon Valley Bank, surveyed more than 300 U.S.-based tech/life sciences startups. The results indicate an improving economic environment, but also show that more access to capital is needed to make a complete turnaround.
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Three-quarters of emerging businesses plan to hire new employees in 2010.

Hardware and software firms are especially optimistic sectors for improvedbusiness this year.

One-quarter of firms looking to hire see access to talent as a challenge,possibly setting up a talent war.

The hardware sector has greatest issue with landing talent, as cited bynearly 30% of hardware startups.

Another big challenge: Availability of VC investment, down by 37% in 2009.

86% of those hiring will create jobs within their home state; only 21% planto hire employees abroad.

Half of the companies surveyed failed to meet expected revenue targets in2009.

Help wanted from government: More R&D grants (cited by 59% of startups),healthcare reform (49%), better tax policies (48%) and intellectual propertyprotection (47%).

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