Where have all the angels gone? Not the celestial ones, the silver ones. | by Michael Trigg | April 2022
Not the celestial ones, the silver ones.
Jhe world is becoming a meaner place. The gap between those who have and those who have not is widening by leaps and bounds. On the “without” side of the ledger are the homeless, the homeless, the marginalized, and those on minimum wage. The middle class or the middle class, call it what you want, are decline in number in most countries.
On the “with” side are the multi-billionaires, uber-millionaires, oligarchs and power brokers, those who control the majority of the financial reins in the world. The old adage; “the poor get poorer and the rich get richeris as true today as it was when it was invented.
Increasingly, it seems, those who control the money seem determined to keep it. This is done very much to the detriment of small entrepreneurs, entrepreneurs, inventors and idea carriers who are looking for capital. It seems as an entrepreneur that more and more angels and investors limit their investments to “sure things” or need to see 150% traction in a project before investing.
Charitable giving is down both in the UNITED STATES and Canadaprobably because of declining disposable income in both countries. The fact that inflation is rising slowly but steadily does not help matters. Federal banks in the United States and Canada are raising interest rates, which will force many small and medium-sized businesses to tighten their belts as the money supply shrinks and borrowing rates rise.
The big banks are no longer in the small business business. They’re not there to help small businesses grow, no matter what their sales pitch.
I remember when I first went into business in 1974. I opened a business account with a small local bank. The manager was very friendly and very helpful. As my business grew, we became good friends. To get through the ups and downs of the economy, I applied for and was granted a business line of credit. From time to time over the next few years, I had the opportunity to purchase heavily discounted inventory for the company, purchases that exceeded my line of credit.
At that time, I would phone the bank manager, explain to him the need to increase the funds, and he would increase my LOC limit on the condition that I sign the documents on my next visit to the bank. I have done this many times and I can say without a doubt that the banks’ liberal policies have helped me grow my business.
Then my small business friendly bank was taken over by one of the big banks and everything changed. The manager was transferred to another city. The small bank has become a big bank and with all that inferred. It has grown from a friendly, locally managed and staffed local bank to a large bank with high demands and very strict rules.
The internet has been a boon for small businesses and entrepreneurs by providing them with funding tools such as crowdfunding, peer-to-peer lending, and better access to finance through online banks.
However, there are still too many projects and entrepreneurs chasing a dwindling pool of available capital.
What is the solution? I think this calls for a paradigm shift in how those with deep pockets and financial institutions view requests for seed capital. I don’t see the government’s involvement in the solution. It’s up to those with the money to come to the table with less onerous, more open-minded terms when approached for business funding by real ideas and entrepreneurs trying to take things forward. their business on the financial scale after prime their first steps.
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