Wednesday November 18, 11:49 PM
CORRECTED-Venture capital creates jobs, but not enough
By Gina Keating and David Lawsky
HUNTINGTON BEACH, Calif., Nov 17 (Reuters) - Chief executives of start-up companies supported by Intel Corp (NASDAQ: INTC - news) said on Tuesday they expect to offer more jobs, after a long drought during which they laid off people.
Venture capital-backed start-ups have long held out the promise of jobs and growth, but attendees at a conference of start-ups said their offerings are not enough to ignite a sputtering economy.
The chief executives of some of the more than 400 start-ups supported by Intel Capital, the venture capital arm of the world's largest chipmaker, gathered at a luxury hotel on the California coast to talk about their futures.
Shortly after the National Venture Capital Association in Washington said 2,500 venture-backed start-ups have nearly 11,000 jobs available, Intel Capital President Arvind Sodhani held out the hope in a welcome speech here that innovation from start-ups will help rekindle prosperity.
But his optimism is for the long-term.
Sodhani said 20 of Intel's start-ups -- most in China, India, other parts of Asia and Europe -- are nearly ready for initial public offerings. He cited two recent IPOs but would not predict when over the next two years others might happen.
'Unemployment is going to be sticky for a while ... growth is going to be hard to come by,' he told Reuters.
A Federal Reserve Bank of Philadelphia survey of private economists this week was equally gloomy: 'The job market looks weaker now than it did three months ago.'
Some start-ups at the Intel conference said they would welcome help from the government to grow faster.
Christine Lemke and Tony Jebara, co-founders of New York-based mobile data mining firm Sense Networks, said they will double their staff of 15 by the end of 2010.
STARTING TO GROW
Jebara said a proposal this week by AFL-CIO leader Richard Trumka to use the $700 billion Wall Street bailout fund to spur hiring at small businesses would have a big impact on his firm.
'Even a small amount of TARP money would really change our lives,' he said. 'If you want to impact Main Street you have to help out the small guys.'
Those who have grown worry their success is not part of a bigger trend. David Sun, chief executive of mid-sized Intel partner Kingston Technology, has lifted his U.S. payroll to 900 jobs from 850 at the start of 2009.
'Just because I'm hiring doesn't mean the economy is good,' cautioned Sun, whose California-based memory products company topped $4 billion in revenue in 2008. 'I think my competitors are fading so I am taking their business.'
Others are more optimistic. Moyses Rodrigues, CEO of Automatos, a Brazil-based IT management company, laid off workers in 2009 in the midst of the global downturn but began hiring late this year to bolster his workforce of 250 for what he hopes will be strong growth next year.
'This year we fired people ... to be prepared for the crisis and now we are growing,' Rodrigues said. 'We are planning on hiring more people in the U.S. in 2010.'
Sodhani said Intel will continue to invest heavily in start-ups and not cut back because of the economy.
Other venture firms, which rely on universities and pension funds for their money, are having a tougher time. The National Venture Capital Association registered its second consecutive quarterly decline in fund raising among venture firms last month. It is now at its lowest level since 2003.
(Editing by Steve Orlofsky) Keywords: INTEL CAPITAL/JOBS
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