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Do Small Companies Look More Attractive To Investors in the Current Economic Climate?

One has to wonder whether or not putting your money into publicly traded securities will ever be the same after the latest stock market woes and bailouts.  Small and medium sized companies looking for private investment including startup companies, have always had to compete in the capital markets against money being placed in the publicly traded markets.  I have to wonder... Won’t small and medium sized businesses look like better potential investments moving forward? 

Many small and medium sized businesses have great concepts but fail to realize their potential as a result of the lack capital.  Finding private investors to make five, six, and seven figure investments in your company has always been an extreme challenge.  There is no publicly available market for companies to seek angel, start up and expansion-level private capital.

Everyone gives lip service to the proposition that America’s economy is built on small and medium sized companies.  Yet, virtually all of our attention, love and affection goes to the behemoth corporations, many of which are now failing.  Anyone who owns mutual funds has made the decision to place their hard-earned dollars into the coffers of these large, mostly inefficient corporations. 

Don’t small businesses start to look like a pretty good investment?  It is time for people to wake up and smell the coffee.  We are living in a new economic reality.  Everything you once thought about the stock market, global economics and the economy are history.  The world as we knew a year ago will never return.  Those of you who think that the current efforts by our federal government will restore what we had five or ten years ago are crazy.  The global economic crisis is in part a realization that capitalism has changed in a post-industrial aged world.  One of the beneficial outcomes, once we stop pumping money into these huge corporations and just simply let them file chapter 11 bankruptcy, will be that small and medium sized businesses will start to get more attention from people with capital looking for a return on their investment.  Perhaps America and the world are ready to start investing in the idea companies with real potential for return on investment. 

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