Venture capitalists are being more cautious, but a good company is a good company. A good management team is a good management team. If you have a good management team, if you have a good business plan, if you have a good vision for growth, if you have an effective strategy, if you have something unique about your product, you will find capital. It will come to you and you will be able to get it. But you have to position yourself in such a way to be able to access that capital.
HB: How is technology changing the process of obtaining capital?
FP: Technology allows capital to flow instantly across borders in ways that people never thought was possible. You have the opening of markets that allow for financial institutions to do business in Asia and Europe, and European financial institutions to do business in the United States. There are European insurance companies that have billions of dollars under management that can buy U.S. companies. These companies have to invest someplace. Technology is going to allow them to make those investments very easily from wherever they are.
HB: A recent study shows that minority-owned businesses havenít made much progress in obtaining federal contracts over the last 10 years. What do you think needs to be done?
FP: You need the executive of that government to make it very clear to the entire governmental organization that doing business with small and minority-owned companies is a priority.
The second thing that has to happen is that a lot of the government contracts have to be broken down. They are simply too large. The government has to make the effort to break down these contracts into bite sizes so minority-owned companies can compete.
The third thing the government can do as an option to breaking down those contracts is to tell large companies to form joint ventures with minority businesses so they come in as a team.
HB: What do you think of the Bush administrationís approach to the California energy crisis? How will small businesses be affected?
FP: My only judgment is that the administration has been inexcusably neglectful of the energy crisis in California. It took a while for the administration to understand that the economy of California is vital to the economy of the country. If the economy of California suffers significantly, the nationís economy will suffer, too. Someone didnít make that connection quickly enough. Thatís a huge state. When something like this hits a big state in such a huge way, with billions of dollars in lost revenue to consumers or the government, thatís a crisis. I donít think that the Bush administration acted quickly enough.
My second observation is that the reaction, when it did happen, was unimaginative. There was no thinking outside of the box to really deal with the crisis. Thatís how you deal with a crisis; you throw away all the old rules.
The third observation I would make is that had this been the state of Florida with this kind of energy crisis, I can tell you what would have happened. President Bush would have sent a hit squad of his best people to Florida immediately from every department in the government that had anything to do with the energy crisis. He would have been out there sooner, and they would have been working day-to-day with the government of Florida to resolve the crisis.
We have investments among California companies, and itís something they worry about. If you have a small manufacturing organization, you will be less able to withstand a blackout than a large company. If you are a small vendor and all of a sudden your energy bills have gone up 300 percent, thatís going to hit you harder than a large company.
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