A new report shows that fewer than one in 10,000 start-ups have venture capital (VC) in hand when they open their doors for business. The 2006 Global Entrepreneurship Monitor (GEM) Finance report was directed by Babson College and London Business School. Among 42 nations participating in the 2006 GEM study, 208 million informal investors - family, friends, neighbors - provided $600 billion to entrepreneurs' businesses, and entrepreneurs themselves fueled 62% of start-up capital for their new ventures. And that money goes almost immediately into the GDP as entrepreneurs spend it to pay wages and buy goods and services for their businesses. For all GEM nations combined, the average amount needed to start a business is $65,000.

"Educators should place much more emphasis on financing from entrepreneurs and informal investors...and much less on the role played by venture capitalists," said Babson Professor William D. Bygrave, who authored the GEM Finance report, "And entrepreneurs must figure on funding about two-thirds of the initial capital needed to launch their ventures." http://www.gemconsortium.org