Startups May Face a Capital Gap

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The probability of a venture capital firm investing in a start-up business now is far less than it would have been in 1999, reports “INC.” Magazine. Ironically, this is partly due to the glut of capital available that venture capital funds are trying to invest, which is pushing them to do bigger deals, sums of $10 million and up that the typical start-up cannot absorb. Jeffrey Sohl of the
Center for Venture Research at the University of New Hampshire calls this “the capital gap.”

How to Raise Your Firm’s Financial IQ

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In this excerpt from the new book “Financial Intelligence,” the authors tell HBS Working Knowledge that “it is not enough to give a one-time training course or hand out an instruction book and expect everyone to be enlightened.” Repetition and engagement are both critical if financial literacy is going to become part of a company’s culture.

Wharton Prof Measures Cost of Employee Absences

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Wharton Professor of health care systems Mark Pauly has led a team that measured the financial consequences of employee absences for individuals in thirty-five different job classifications across twelve different industries. Distilling the learning from 800 different interviews, the team was able to establish “multipliers” of workers wages, that described the financial impact of a day’s absence as a proportion of the worker’s daily wage or salary. The multipliers ranged from below 1.1 for waiters and non-residential construction workers, to greater than 1.5 for motor vehicle salespeople and mechanical engineers. Pauly believes this work gives companies the ability to more accurately measure the payoff that comes from improving the health of their employees.

NY State Ranks Near Bottom in Small Business Survival Index

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New York state ranked 44th amonth the 50 states in terms of policy environment in the 2005 Small Business Survival Index released by the Small Business & Entrepreneurship Council. Raymond Keating, chief economist for the council, and the survey’s author told the “Westchester County Business Journal” that “politically, New York has a big-government philosophy, which leads to high income and property taxes. The costs of the state’s policies are real and obvious, but it appears the policymakers talk themselves into ignoring the consequences of the economic choices they make.” South Dakota, Nevada and Wyoming ranked at the top of the 2005 index, with the most small business friendly policy environment.

Experts Disagree on Why Oil Prices Go Up

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Writing for the San Francisco Chronicle,, Kathleen Pender quoted two widely divergent viewpoints on oil prices. Some experts, including a team from Goldman Sachs, point to the increasing world demand, at a time when there is little excess production capacity, as a factor that will keep oil prices in the $50 to $105 per barrel range for years to come. But a separate group of experts says that if it were not for speculators, that oil would still be trading in a $30-40 per barrel range.