Around the world, small venture capital firms are giving seed money to deserving business people in the belief that this is the way to create jobs and grow the economy. An interesting Kauffman report published four years ago suggests that this is a good route to take.  Jump Start is Doing Just that in the Cleveland Ohio area in the US.

Consider the debt ceiling in the US.  According to Goldman Sachs, without an increase in the ceiling, the Treasury would no longer be able to issue debt from October 17 and would deplete its cash by the end of the month. Much confusion exists about what would happen if the Treasury ran out of cash and could not increase its outstanding debt. The optimistic view is that it could meet its priorities, including debt service, by managing its payments. If so, no default need occur. Jack Balkin of Yale University argues just this. The pessimistic view is that managing its cash flows in such a way would be illegal and possibly impossible – not least because cash receipts fluctuate substantially. But the Treasury, playing a game of chicken, would argue the pessimistic case even if it believed it could cope.

At best, a failure to raise the debt ceiling would necessitate a sharp cut in spending. At worst, the US would default. Analysts at Bank of America Merrill Lynch argue that hitting the ceiling would require the US to balance its budget at once, cutting spending by about 20 per cent, or 4 per cent of GDP. That would push the US into another recession – even if there were no default. The consequences of an actual default, particularly one that lasted for some time, are beyond prediction. Unlike a shutdown, there is no precedent, for good reason. The notion is suicidal. To Debt or Not to Debt, That is the Question  from Martin Wolf in the Financial Times.

A terrific TV series ended on September 29th, but is sold on Amazon and Netflix.  For entrepreneurs it is worth a look.  Three things help the show’s star, a chemistry teacher turn an insight into a flourishing business. The first is huge ambition. He is not in the “meth business” or the “money business”, he says. He is in the “empire business”. The second is product obsession. Other dealers might peddle “Mexican shoe-scrapings” on the ground that addicts care little about quality. He produces the king of meth, so pure that it turns blue, and would rather destroy an entire batch than let an inferior product be traded under his brand. The third is partnerships and alliances. He spots talent in a former pupil turned drug-dealer, Jesse Pinkman, and forms a strong working relationship with him. He also contracts distribution to a succession of local gangs so that he can concentrate on the higher-value-added part of the business: cooking and quality control.  How do things turn out?  TV Reflects an Entrepreneur’s Mirror image

The recent Global Entrepreneurship Monitor found 126 million women starting or running businesses, and 98 million operating established (over three and a half years) businesses. Thatʼs 224 million women impacting the global economy — and this survey counts only 67 of the 188 countries recognized by the World Bank.

These entrepreneurs cross the spectrum of micro to high growth — from supporting life to creating wealth. They include hair salon owners, high tech visionaries and everything in between, all making critical economic contributions.  Women-The Driving Force of Entrepreneurial Growth

In the US, the gap between rich and poor has been widening dramatically.  Mike Novogratz of Fortress Asset Management answers questions about the divide and calls for moral revolution:  companies need to look at a balance between shareholders, customers, and employees. I guess that is a moral revolution.  Addressing the Income Divide

New research shows what many have long suspected: women entrepreneurs are poised to lead the next wave of growth in global technology ventures. A report recently released by Illuminate Ventures, a San Francisco Bay Area venture capital firm, shows that women-led technology start-ups generate higher revenues per dollar of invested capital with lower failure rates than industry averages.

•            Efficiency, efficiency, efficiency: The high-tech companies women build are more capital-efficient than the norm. The average venture-backed company run by a woman had annual revenues that were 12% higher than those run by men using an average of one-third less capital.

•            Big Progress in Recent Times: More women are serving as officers of venture-backed companies with successful exits. In 1988, only 4% of the 134 firms that went public in the U.S. had women in top management positions growing to over 41% percent by 2004. Of 2009’s 19 high-tech IPOs, all but two had at least one woman officer.

•            Fewer Failures: Despite often being capital-constrained, women-owned businesses are more likely to survive the transition from raw start-up to established company than the average.

•            Expanded IP Contributions: From 1985 to 2005, the annual number of U.S. female-invented fractional software patents increased 45-fold—three times the average growth rate in that sector.

•            Growing Influence in Start-ups: Women-owned or led firms are the fastest growing sector of new venture creation in the U.S., growing at five times the rate of all new firms between 1997 and 2006— now representing nearly 50% of all privately held businesses.

•            Venture-level Returns: In the past 10 years more than 125 companies with over 200 women founders or officers have achieved IPOs or >$50M M&A exits in the U.S. high-tech sector alone.

•            Diversity Improves Performance: Organizations that are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers—and research shows gender diversity to be particularly valuable where innovation is key.

•            Financial Bottleneck: In 2008 woman co-founded tech businesses gained less than 7% of venture investment in the high-tech sector and women owners of $1M+ businesses are still twice as likely to use debt versus equity capital as their male peers.

•            Impact of Women Investors: Women now represent over 15% of angel investors and 5%–7% of partner-level high-tech venture capitalists in the U.S. Firms with at least 1 women investment partner are 70% more likely to lead investments in a woman entrepreneur than those with only males.

The bottom line: More than ever before, women are influencing the face of business. They are on the cusp of becoming a leading entrepreneurial force in technology. As the global economy regenerates, new business models are needed to stimulate economic and job growth. Investors seeking to reinvigorate bottom-line performance and to favorably impact the entrepreneurial strength of the U.S. economy would be wise to support strategies that enable high-tech start-ups that are inclusive of women entrepreneurs.    High Performance Entrepreneurs