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Contact: Robert Albright |
Phone: 919-549-7500 ext.123 |
CED Takes Economic Pulse of Entrepreneurial Community
Findings Point to Key Business Challenges
in the Area
January 30, 2003, Research Triangle Park, NC - The Council for Entrepreneurial Development (CED) has completed a survey of area entrepreneurs asking them to size up the current business climate. The survey, which included responses from 177 area entrepreneurs of all experience levels and from various industry sectors, provides a snapshot of the key business challenges facing the region's entrepreneurial community. The results will be used in part to enhance CED's upcoming Money & Markets 2003 conference (www.cednc.org/mm/2003) scheduled for Feb. 7 at the Sheraton Imperial Hotel, and to determine future programming needs.
Les Bethune, a partner with Ernst and Young LLP and co-chair of the Money and Markets 2003 conference, said the results were important indicators of the challenges that entrepreneurs face.
"Based in part on the favorable movement in third quarter venture financing, CED administered the survey to determine first hand the existing level of business and financing opportunities," Bethune said. "With the uncertainty surrounding any economic turnaround, we wanted to gain a sense of the entrepreneurial challenges now, in the last 12 months, and looking to the future."
Below are important findings of the survey:
- Survey respondents most frequently cited closing the new sale as a top challenge faced in running a company in the entrepreneurial sector today. Seeking new or alternative sales and marketing channels was cited second, and managing burn rate ranked third.
- Approximately 40 percent of all survey respondents cited revenue financing as the most realistic financing alternative for high growth companies. Almost 50 percent of respondents (47.2 percent) noted that the time horizon necessary to close a round of funding was approximately 6 to 12 months.
- 76 percent of respondents noted that the prospects for starting an entrepreneurial business in North Carolina today were fair or better than fair; however, 85 percent of respondents felt that the prospects for starting an entrepreneurial business in a state other than North Carolina were fair or better.
- CED's survey also revealed perceived differences in financing alternatives for the biotech vs. the IT sector. Of the IT respondents, close to 50 percent cited revenue financing is the most viable option for the sector. In contrast, respondents in the life science sector were spread fairly evenly among partnerships, revenues and venture capital (VC) funding as the most realistic alternatives.
- In terms of entrepreneurial perceptions of the business factors sought by investors, an experienced management team, sustainable business model, profitability and revenue growth all shared top honors almost equally. Also, 56% of respondents suggested these measurements had not changed in the last 12 months.
"The results reinforced some of our perceptions of entrepreneurial challenges, and gave us insight into new ones," Bethune said. "I'm convinced more than ever in light of some of the survey results, that a number of the M&M sessions such as 'Alternative Sources of Funding' will provide great ideas for the issues we face."
About Money and Markets: CED's Money and Markets 2003 conference features 11 interactive panels that deal with important economic questions, many of which the survey results above have highlighted. Panel topics include "Alternative Sources of Funding," "Exits: Getting Deals Done," "The New Playing Field: How the Rules Have Changed" and "The Realities of Valuation: Then and Now."
About CED: The Council for Entrepreneurial Development, located in Research Triangle Park, NC, is a private, non-profit organization formed in 1984 to stimulate the creation and growth of high-impact companies in the greater Research Triangle region. CED provides education, mentoring and capital formation resources to new and existing high-growth entrepreneurs through annual conferences, seminars, workshops and monthly programs on entrepreneurial management and finance. CED is the largest entrepreneurial support organization in the nation with more than 5,000 members representing 1,200 entrepreneurial companies, financiers and professional firms. www.cednc.org