Can deep cuts in the banking industry affect non-profit tech innovation?

Credit crunchWaking up to read that Lehman Brothers has filed bankruptcy, and that Merrill Lynch was just purchased by Bank of America, made me think about the innovation cycles that sweep through the technology world we live in. Within an already tightening credit marketplace, it’s hard to believe that innovative firms are going to receive capital they need to continue growing from anywhere other than VCs and angels now.

The question for those of us in the nptech sector is whether this macro-credit crunch will stymie innovation for us in the near-term.

Companies in the non-profit technology world will be especially squeezed, particularly those trying to invest deeply in new efforts. If it wasn’t already hard enough for new startups trying to provide innovative products to the non-profit sector, expect it to become more difficult getting the cash to do so now.

What does all this mean to the non-profit sector? Considering the great period of consolidation the non-profit tech sector has seen in the past few months, likely not much.

Our marketplace seems to have been cleaning itself up a bit during the past three years, letting smaller companies go by the wayside, and larger companies merging together to form more powerful services. Additionally, it seems unclear if those technology providers outside our sector (think Twitter and the like) are going to be deeply affected if most of their funding isn’t coming from traditional investment and banking houses, but rather private equity and VCs.

At some point, though, the credit crunch is going to hit everyone. The real question is who will be able to withstand the crunch and expand at the same time to better serve our community.

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This entry was posted on Monday, September 15th, 2008 at 10:43 am and is filed under nptech. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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