The Law Office of Lynnette Ariathurai A Professional Corporation

Education may be good business startup opportunity in California

Entrepreneurs play an important role in today's society. They are usually heralded in inspirational success stories in California as well as other states. Many times a new business startup will dramatically change the way people live in some aspect or another for the better. Currently, there are few industries in more need of new and innovative ideas than the education industry.

Just like any other industry, venture capital investors play an important role in helping new companies in the education industry initiate their business endeavors. During the late 1990s, there was a surge of venture capital investments on educational ventures, particularly in for-profit schools and e-learning firms. However, most startups created during that surge eventually failed, with the exception of a few success stories. The dismal success rate of education ventures eventually scared away most potential investors from the industry all together.

Lately, there are indications that investors may want to reconsider the education industry for potential venture capital investments. Schools are more willing to invest in educational technology since they are now more adept technologically than ever before. Also, the cost of hardware and software development has decreased significantly since the late 1990s. These factors have resulted in education technology firms garnering $1.1 billion via venture capital investments during 2012, which is more than twice the amount garnered in 2011.

On the other hand, despite changes in education economics, a business startup in the state of California will still need to have a solid business plan in place in order to successfully convince venture capitalists to invest in the new company. The business plan will need to include a thorough operations plan as well as an effective marketing strategy. The plan will also have to take into account any rules and regulations applicable to the industry.

Source: InsiderOnline, For Education Entrepreneurs, Innovation Yields High Returns: Learning from Larry Berger, Jonathan Harber, and Ron Packard, Julie Landry Petersen, Feb. 7, 2014

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