The government’s plan to buy $700 billion in illiquid assets will have little direct impact on technology companies in the state, industry watchers said Tuesday.
Most of Colorado’s tech firms are privately held and therefore not directly affected by daily fluctuations in the market, said Su Hawk, president of the Colorado Software and Internet Association.
“It affects (tech companies) the least of any industry,” she said. “Tech is more immune from having repercussions.”
Technology companies, specifically software or Internet-based companies, don’t rely on bank loans but instead turn to private investors and venture-capital companies, Hawk said.
At eBags, a Greenwood Village-based online retailer, sales are up as people shun driving to shop, said the company’s president and chief executive, Jon Nordmark.
“With the way the Internet works and the way technology is these days, you can still be creative and innovative without it costing a lot of money,” Nordmark said. “There are not big capital outlays; it’s Web design and software development.”
Yet Hawk said stability in the stock market is needed because “it makes people feel more comfortable.”
“If we continue with the . . . turmoil, it just sheds a shadow on the market,” she added. “And it’s not good for anyone.”
Nordmark said the current economic period is not like the dot-com bust seven years ago as different companies are affected for different reasons.
“In the last bust, all the overinvestment was in technology companies. . . . It was a bunch of startup companies in a startup industry,” he said. “This one is more of a mortgage collapse. It’s not that money is being overspent in the companies; it’s more that the money was being overinvested in high-risk mortgages.”
