Several of the recent surveys of small business owners I have cited over the past weeks have been showing signs that confidence is improving. Mind you -- it is not a robust rebound of confidence, but at least there seems to be a sense that the worst may be over. Notice that I choose my words carefully --"...the worst may be over..."
A new survey of Silicon Valley VCs from the University of San Francisco seems to be telling the same story. The Silicon Valley Venture Capitalist Confidence Index rose slightly again in the 4th quarter of 2009.
Kurt Keilhacker of TechFund Capital confirmed, "While there is some caution with macro employment problems and worrisome tax policies, there is guarded optimism in Silicon Valley." Tom Rodgers of Advanced Technology Ventures detailed, "The environment is going through a natural Darwinian contraction...We will see the stronger companies surviving and thriving and the more disruptive and resilient approaches will continue to be funded. This is good for the long-term health of the environment."
While such surveys are encouraging, we need to keep things in perspective. This optimism is not due to an imminent return to economic growth.
Remember -- we are seeing results in these surveys that come from the survivors. And even they are not optimistic because they see good times in the foreseeable future. They are a bit more optimistic simply because they have survived the last two years.
If employment does not rebound this optimism will fade. And employment will not improve due to the Keynesian Folly we see coming out of Washington with massive increases in government spending. It will come, albeit slowly, by turning entrepreneurs loose by putting more money in their coffers through tax cuts and getting government out of their way.
Any signal that we will face higher tax rates will surely kill much of this optimism. And higher tax rates are clearly still on the table since the President was careful to say in his speech last evening that he has not yet raised income taxes.
I am pleased that the panic is over for now. But any improvement in optimism is very fragile and tentative.
A new survey of Silicon Valley VCs from the University of San Francisco seems to be telling the same story. The Silicon Valley Venture Capitalist Confidence Index rose slightly again in the 4th quarter of 2009.
Kurt Keilhacker of TechFund Capital confirmed, "While there is some caution with macro employment problems and worrisome tax policies, there is guarded optimism in Silicon Valley." Tom Rodgers of Advanced Technology Ventures detailed, "The environment is going through a natural Darwinian contraction...We will see the stronger companies surviving and thriving and the more disruptive and resilient approaches will continue to be funded. This is good for the long-term health of the environment."
While such surveys are encouraging, we need to keep things in perspective. This optimism is not due to an imminent return to economic growth.
Remember -- we are seeing results in these surveys that come from the survivors. And even they are not optimistic because they see good times in the foreseeable future. They are a bit more optimistic simply because they have survived the last two years.
If employment does not rebound this optimism will fade. And employment will not improve due to the Keynesian Folly we see coming out of Washington with massive increases in government spending. It will come, albeit slowly, by turning entrepreneurs loose by putting more money in their coffers through tax cuts and getting government out of their way.
Any signal that we will face higher tax rates will surely kill much of this optimism. And higher tax rates are clearly still on the table since the President was careful to say in his speech last evening that he has not yet raised income taxes.
I am pleased that the panic is over for now. But any improvement in optimism is very fragile and tentative.
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