I'm the founder of an Internet start-up. For the past 2 years, I've worked 80-hour weeks writing business plans, writing marketing plans, writing code, and generally running my ass off. My company provides an online product that helps companies manage their business -- business software, not some gambling, porn, or ring-tone start-up.
I gave up my salary, emptied my bank account and mortgaged my house to start my company. I created jobs, not only for my two employees, but for a number of programmers, designers and consultants. I've taken huge risks to create value, hoping I can make a living, and maybe even get lucky someday and sell my company at a profit. Well, that was the thought. Now I'm just struggling to survive.
Now the world is slowly caving in, as banks deny me credit, credit card companies lower my limits and liquidity dries up everywhere. Meanwhile we pump billions into saving those who gave us this mess, politicians talk about the importance of small business while entrepreneurs are starving for cash and captains of industry get billion-dollar bailouts. Follow me over for a view of exactly what we're killing in America.
I don't want to hold myself up as the paragon of small business virtue. I'm just one SOB who had the ambition to take a risk and innovate. And I knew the risk I was taking. I knew there was no guarantee of success, only of back breaking work and hopefully a little luck. The odds are so great against my success you have to be a little insane to do what I do.
First of all, when I went to the bank to inquire about an SBA loan, they thought I was nuts. How many customers do I have? How much inventory? What are my sales figures? I explained I was a software startup and showed them my business plan--this is silicon valley after all. No SBA loans for ventures like mine. Go to the Venture Capitalists. So I did. I made the rounds of Sand Hill Road, as well as Boston. I gave pitches, and got call backs, and even a term sheet. But my timing was off. In September, the market fell through the floor and VCs rolled up the doormat for anyone but middle stage businesses. Early stage startups? Too risky. Late stage startups? No exit on the horizon. I worked with my attorneys to draw up a private placement offer and started talking to friends and family. But the market kept tanking, and any funds people had to make side bets on a venture dried up.
No problem. I got into this venture to build a business, not to play a funding shell game. So I buckled down and focused all my energy on customer development. I put more time into the product and marketing efforts. I made endless sales calls, I pumped my blog and social media programs to gain awareness, and I'm making sales. I'm running on fumes, but I'm cash flow positive. I can pay my employees enough to survive, I can keep my business floating, but I don't have the extra funds to invest in more product upgrades or more sales and marketing staff.
Let me tell you, making sales in this economy is a damn hard proposition, and I'm proud as hell to have developed a product I can stand behind and that my customers want. I have a vision and a clear path toward building a company that will one day employ a few hundred people in respectable, high-paying professional jobs. The only problem is, I may not get there. Today, American Express notified me that despite my years of business, stellar credit, never a missed payment, they're cutting my credit limit. My liquidity is drying up. The grease that keeps the engine lubricated in between customer payments, so I can buy a replacement laptop, or pay for a flight to a sales meeting, or put gas in my car for commuting, is all going away. I called on one of dozens of new credit card offers I receive in the mail every week, and was told the offer was no longer being honored. Meanwhile the card I have left is being jacked up to more than 20% interest.
Make no mistake about it. While your tax dollars are being put into propping up companies that made horrendous business decisions in an orgy of unsustainable growth, the same banks that helped create this mess are lowering the hammer on small businesses by cutting credit and raising rates to the level of abject usury. As if bringing the nation to its knees was not enough, now they are sucking the oxygen out of the air for men and woman who've taken the greatest risks to innovate business and create jobs right here at home.
I have no idea what tomorrow holds for my company. I feel sick for my employees. I feel sick for my wife who has stood behind me and swallowed her fear at the risks I've taken because she believed in me. I'm working my ass off to provide value for my customers and to earn their prompt payment. But guess what? My customers are in the same position I'm in. One's already gone down in bankruptcy. Others aren't showing any signs of difficulty, but how long can it be before everyone starts hording cash?
We are killing the soul of the American Dream, ladies and gentlemen. We robbed it, we kicked it to the ground, and now we're grinding our heel into the back of its head while its face is in the dirt. I honestly find myself grieving for the America that gave me the sense of hope and ambition I fear I won't be able to pass on to my son.