May 9, 2005 4:00 AM PDT
Tech start-up scene poised for revival
Bonomi recently landed about $10 million in venture funding for his company, Minerva Networks, which makes software that lets phone companies offer television services. This year, the 65-person, Santa Clara, Calif.-based company aims to hire 30 to 35 people, half or more of them likely to be computer professionals based in Silicon Valley or other parts of the United States.
Rapid growth, to be sure. But Bonomi says he would have brought on close to 80 people if the year were still 1999, when he led a software company focused on the DVD-publishing market and was part of the era's culture: Hire first, figure out how to increase revenue second.
Venture capitalists have been raising new funds at a fast clip, and the money is expected to fuel a new wave of investments in a variety of tech fields.
Technology pros have reason to be cautiously optimistic about jobs at start-up companies. But the scale of the funding likely will not rival that of the last Internet craze, and some of the positions created by new firms are likely to be located offshore.
As Bonomi suggests, technology professionals have reason to be cautiously optimistic about jobs at start-up companies. Venture capitalists have been raising new funds at a fast clip, and the money is expected to fuel a new wave of investments in fields including energy, wireless communications and the Internet. But the scale of the funding likely will not rival that of the last Internet craze, and some of the positions created by new companies are likely to be located offshore.
Even so, new infusions of venture capital and seed money from individual "angel" investors are translating into real jobs again for computer pros in Silicon Valley, says Laura Roden, who sits on the board of the Silicon Valley Association of Startup Entrepreneurs.
"It seems to me that there is a resurgence," said Roden, who knows scores of managers and experienced software developers in the region. "The good people are all being hired."
No Internet Gold Rush
A flurry of hiring by new tech companies is good news to workers in the tech industry, who weathered hundreds of thousands of job cuts in the wake of the Internet bust. Silicon Valley, the heart of America's tech industry, has been losing jobs in the fields of software, semiconductors, and computer and communications hardware.
A recent report indicated that the U.S. tech industry may have reached the bottom of the trough last year when it comes to employment. But the average number of unemployed workers in nine high-tech categories remained close to 150,000 in 2004, according to the U.S. Labor Department. And in the first three months of this year, technology companies slashed nearly 60,000 U.S. jobs, according to another study.
U.S. venture capital, 1990-2004
The current climate is by no means a return to the heady times for tech start-ups five years ago or so. U.S. venture capital investment more than doubled in 1999 to $54 billion, and nearly doubled again to $105 billion in 2000 before dropping to $19 billion by 2003, according to research by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association. Last year marked the first annual increase in VC investment since 2000. But the total for 2004 was $21 billion--a fifth of what was plowed into start-ups during the dot-com peak.
Venture capitalists invested $4.6 billion in the first quarter of 2005, according to a survey by the above-mentioned companies.
Back in the go-go days, nascent technology companies were caught up in a kind of arms race, which necessitated hiring lots of people, said