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Credit Crunch Boosts Entrepreneurship

For Release:
On or after November 15, 2007

Contact:
Media Relations
PartnerUp, Inc.
Direct: (952) 229-8300
E-mail: newsroom@partnerup.com

MINNEAPOLIS — In the midst of a severe credit crunch, a new survey by PartnerUp.com shows entrepreneurship to be a possible light at the end of the tunnel.

Professionals in both the residential real estate and financial sectors, who are feeling the effects of the credit crunch, are departing their jobs in record numbers and heading for the world of entrepreneurship.

Of the professionals who left these industries in the past three months, the survey found that 56 percent are seriously considering starting their own business, while 13 percent are already on their way.

Web companies and other technology businesses are some of the hottest areas being pursued by these entrepreneurs. Other hot areas are advertising/marketing and retail.

The credit crunch has Cody Todd, manager of a small retail brokerage in Bellevue, Wash., looking to get out while he still can.

“Business has slowed so much that I am having to go back to being a loan originator because the owner can’t afford to pay my salary anymore,” he said.

These industry circumstances have pushed Todd to make the leap in to entrepreneurship by creating JustMyEvents, an events-based online social network that is still in the works. Three out of four members of Todd’s management team have come from the mortgage business. So far he says his decision to move on to entrepreneurship has been the right one.

“Starting a business is an incredibly satisfying experience,” he said. “It is so great to know that you control your own destiny.”

Todd’s story is just one example of this larger national trend of the credit crunch driving professionals toward entrepreneurship, but the trend also has implications on a broader economic scale.

“The credit crunch has sparked entrepreneurship, but more importantly, entrepreneurship is sparking economic expansion,” said Dane Fox, vice president of business development at PartnerUp.com. Small businesses are now responsible for more than 97 percent of new jobs, according to a recent report by the Small Business Administration. “If this trend continues, entrepreneurs and small businesses may be the beginning of the end of the credit crunch,” Fox said.

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About PartnerUp.com
PartnerUp.com is a free social networking Web site for small business owners and entrepreneurs. The site helps entrepreneurs and small businesses owners find business partners or co-founders, network with other businesspeople, ask for and offer up advice, and find resources for their business. PartnerUp.com was founded in February 2005 and is headquartered in Minneapolis.

Additional Survey Results
The top industries in which respondents indicated that they were likely to start a business were:
Internet/Web/IT/Technology
Advertising/Marketing
Retail
Arts/Entertainment/Media
Consulting

The states with the highest percentage of respondents indicating they were seriously considering starting a business, or are already working on starting a business, were:
California
New York
Texas
Florida
Arizona
Minnesota
New Jersey
Washington
Georgia
Maine

About the Survey
PartnerUp.com conducted a national random survey of 862 professionals who have been employed in the residential real estate, mortgage, and/or financial industries within the last 6 months. Respondents were asked a variety of questions relating to the credit crunch, their future plans, and their entrepreneurial aspirations. The survey was conducted on PartnerUp, using PartnerUp's proprietary research tools during the period of October 10th through November 2nd.

About the SBA Report / Job Creation Data
A recent report by the SBA found that businesses with fewer than 20 employees are responsible for greater than 97 % of all new jobs. This statistic was included in the Small Business Administration Office of Advocacy’s annual report. The data is based on US Census data from 1988 to 2004 (which is the most recent data available). Small businesses, classified as firms having fewer than 20 employees, were responsible for 1,626,793 new jobs in 2003-2004, or 97.1 percent of all new jobs. The SBA report is available on the SBA’s web site at: http://www.sba.gov/advo/research/dyn_b_d8904.pdf.