Relief for first time entrepreneurs?

Phew! Just as Smarta was about to blog about Robin Klein of The Accelerator Group’s (TAG) claim that “funding for first time entrepreneurs won’t happen anymore”, he’s retracted the statement.Robin had insinuated that the investment vehicle that backed Love Film, Mind Candy, GlassesDirect and Moo is now only looking at 2nd or 3rd time entrepreneurs who have already ‘demonstrated’ consumer uptake.However, Robin now says:“TAG loves first time entrepreneurs and makes a habit of backing them. If you look down the list of our investments, more than half were first timers.“We particularly like those who can demonstrate the tenacity, invention, persistence and sheer bloody mindedness that has enabled them to get their product together with little or no external funding.”He does maintain that funding will be harder to come by for those that haven’t tested the model, though:“First time entrepreneurs who simply have a business plan (ie a PowerPoint + spreadsheet) would find it very difficult to get funding. They will need to have built something - a demo - a basic service.”If Robin’s retraction is to be taken at face value, it could actually be good news. Greater emphasis on proving business models and ability to make profit might see a drop in the number of start-ups funded, but should hopefully give those that do secure backing a better chance of survival – especially if the economy dips further.

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