The idea of launching a new company is always scary no matter how much financial backing you have or how wonderful the state of the economy. With news reports of layoffs and skyrocketing unemployment, today's business climate seems particularly unwelcoming for startups. Or is it? That depends on who you ask.

There was no shortage of startups at Demo Fall 09 this week, where over 60 companies vied for attention from venture capitalists. The event highlighted a wide spectrum of new businesses from online dating to commercial print services, and gave entrepreneurs a chance to rub elbows and trade stories.

Despite so many companies competing for an increasingly dwindling pool of investor cash, the overall mood was decidedly positive. InfoWorld's Bill Snyder attended the event and says, "All in all, Demo Fall 09 was an upbeat event, surprisingly so given the state of the economy. Maybe tough times brought out the best in the presenters. Or perhaps real innovation proceeds at its own pace, regardless of the ups and downs of the market." Indeed, there's no stopping the march of innovation but more likely the proliferation of startups is directly related to the do-or-die spirit of entrepreneurs. Typically, they're a scrappy bunch willing to take calculated risks as opportunity presents itself, instead of waiting around for the just the right moment to take the plunge. With so many smart and talented businesspeople getting caught in the teeth of corporate layoffs, it's no surprise some are turning to startups as a way to take more control of their own future.

Not everyone is quite so optimistic that now is the right time to launch a new business. The Baltimore Sun's Gus Sentementes says, "The bad news, for the moment, is that the venture capital industry is in the worst shape since the dot-com bubble burst in the beginning of the decade. Entrepreneurs and leaders of small businesses across Maryland have largely been put on hold as investors became tight-fisted and more demanding, and banks are still stingy with extending credit."

The issue isn't just limited to Maryland and, in fact, startup funding options are drying up all over the nation. In the end, whether or not to launch a startup in these tough economic times may simply boil down to your bank balance. Business owners that can get by on a shoestring budget and find creative ways to get buy until they're able to operate in the black may have better luck than those who must rely on an influx of cash to get started or stay afloat.

Flickr image courtesy of wwarby



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