Startup Outlook 2012: Entrepreneurs are Optimistic and Hiring, but Concerned about Government Policies

Kira M. Newman May 16, 2012 Tweet

Today, Silicon Valley Bank released its Startup Outlook 2012, based on a February survey of 270 executives from early-stage US startups. Here’s a quick roundup:

The Good

According to the report, “The survey revealed that the tech sector in the U.S. is healthy, hiring, has great business qualities and that startups are optimistic.” 64% of startups met or exceeded their 2011 revenue goals, and 61% believe business conditions are better than a year ago. And these numbers are even higher for software startups. Meanwhile, 90%t of software startups are hiring this year.

The Bad

Entrepreneurs’ concerns boil down to two main issues: education and government policy. 60% of entrepreneurs surveyed believe the education system isn’t preparing students properly for the workforce. And again, that number is higher for the software industry.

The fact that so many startups are hiring might mean that they can’t find or attract high-quality talent. “If I look at my own portfolio … we must have several hundred open positions,” said Jeff Clavier, founder of SoftTech VC, on a call today. “There is so much competition today across the growth stage that it’s really, really hard to attract that talent.”

On the policy side, entrepreneurs are most concerned about intellectual property protection, followed by high health care costs and the regulatory environment. In particular, they think the cost of doing business and tax incentives are better in foreign countries than in the United States.

Unfortunately, 83% of respondents felt that the 2012 presidential candidates don’t have solutions to promote growth in the innovation economy, or aren’t focusing on it.

“Left unaddressed, these weak spots could grow and ultimately choke the United States’ ability to sustain its position as the leader in innovation-based economic growth,” the report said.

For that reason, Silicon Valley Bank is launching a startup policy portal to get feedback from entrepreneurs and relay that information to policymakers. If you want to get involved, email mdent@svb.com. And read the whole report, along with an infographic, here.