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New businesses require capital to get started. That capital doesn't need to come from middle-class consumers - it can also come from large companies with hoards
by solatic 9y ago
New businesses require capital to get started. That capital doesn't need to come from middle-class consumers - it can also come from large companies with hoards of cash to invest.
Such hoards of corporate cash are easy to find, there's trillions of it collectively across American corporate accounts [1]. There just aren't many start-ups for them to invest in. From an access-to-capital point of view, there's never been a better time to start a company.
[1] https://www.nytimes.com/2016/01/24/magazine/why-are-corporations-hoarding-trillions.html https://www.nytimes.com/2016/01/24/magazine/why-are-corporat...
- mtgx 9y agoThat's a false conclusion, in my opinion. There are plenty of startups in which money could be put in, but of course "smart investors" don't invest in all startups that may show-up at their doors. So they choose to save their billions and billions of dollars in Cayman Islands. That money goes largely unused in the economy. Also, the vast majority of startups aren't funded by VCs or angel investors, but through personal economies and loans - again, an issue that depends on the strength of the middle class.