Our economy remains in a continuous state of flux and continues to struggle. This is not just true for the American economy, but for the world. Countries such as Greece and Spain have even experienced a complete economic collapse. This tells us the problems are not isolated to our individual economies, but is a worldwide issue. Professors of sociology and economy have long predicted the emergence of an age of information and technology.
Historically speaking, the emergence and growth of a new age have coincided with a marked decline in the previous age. But even if you are among those new startup companies riding the new age wave you are still at risk. And the problem lies with perception. Not long ago, 1 million dollars was considered a large sum of money. Granted, 1 million dollars remains a significant amount to most of us, but no longer classifies you as wealthy. Wealth is now measured by the hundreds of millions and even billions.
Highly motivated and innovative thinkers are putting the new technology to good use. Talented and smart kids are inventing new ideas and products while still in high school and college. Some are even well on their way to economic wealth leading their own startup companies. A sign that your startup company is a success is when a larger corporation offers you a large sum of money to buy your company. Now you are faced with a very important decision, to sell out not to sell out.
People have new ideas every day. The difficult part is getting those ideas off the drawing board and into the market. It often takes many people working together several years to cultivate a successful startup company. The American economy cultivates this spirit of industry and innovation and has produced most of the world’s leading entrepreneurs. But the economic trend in our new age is not to develop a startup company into a new market to contribute products and services and new jobs. The popular trend today is to sell startup companies to existing larger corporations.
When a larger corporation buys a startup company, the end result is not the continued development of that innovation. Often, the patent or idea is suppressed or incorporated into the existing business model incorporation or simply placed on a shelf. No new jobs are created and no economic growth occurs as a result. Furthermore, if the new innovation does reach the market, it will be drastically altered from that of the popular original. Perhaps the most unfortunate aspect of selling your startup company is that the millions or even billion dollars you received is being devalued with each passing year as the economy continues to struggle.
Equally as unfortunate, is what happens to many startup companies that decide not to sell out. Many startup companies emerge as successful businesses. The corporate giants offer them large sums of money to buy them out. The owners reject the offer, but the startup company later stalls and fails. This is why many of the owners of the new startup companies decide to sell rather than to take the risk.
It is in the act of taking a risk that you invested in your startup company to begin with. It is also a risk to keep your startup company rather than sell out. Microsoft and Facebook are examples of successful startup companies they did not sell out. These companies earn billions each year and contribute to the overall strength of the economy.
Perhaps if the larger corporations amended their tactics to invest in and support new startup companies rather than gobble them up, the American economy would be strengthened as result of the new products and services and jobs created.