Bad Corporate Endings Yield Startup Success Stories

Jim Woods used to be a commercial real estate analyst for Deutsche Bank  

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[DB  Loading...      ()   ] in San Francisco. Now he runs his own fledgling company selling organic, naturally-caffeinated beer.

Cheryl DelMastro’s real estate agency and her 22 employees fell victim to Florida’s housing bust. Now she’s running a successful firm selling baby socks to the likes of Target

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[TGT  Loading...      ()   ]  , Shop-Rite and Duane Reade.

Maxine Tatlongari(cq) went from the American Cancer Society, where she was laid off after 11 years as a fundraiser,  to running her own company that sells vanity mirrors and makeup tables.

Source: facebook.com Maxine Tatlongari

All are members of the new class called “accidental or necessity entrepreneurs,” people forced out of work by the recession who have started up their own ventures.

They’ve also decided they rather be their boss than be subjected again to the indignity of a corporate layoff or buyout.

And their numbers are certainly growing, according to the Kauffman Foundation’s latest Index of Entrepreneurial Activity.

Through three quarters of this year, the average percentage of job seekers starting a business increased to 8.99%, compared to 5% for all of 2008, according to Challenger, Gray and Christmas, a global outplacement consultancy.

That’s consistent with 2008 Small Business Administration data showing that the number of self-employed people grew by a record 8.1 percent, about three times the historical average.

LegalZoom.com, the online legal document service, says the part of its business that helps new ventures was up 10 percent in the first half of this year.

Jim Woods launched his MateVeza brand of beer while he was still working for Deutsche Bank, working nights, weekends and vacation days.

The beer, brewed with the South American Herbal tea yerba mate, was named one of the Top 25 Beers of 2007" by Draft magazine. Confident of his beer and its distribution network, he plotted his exit from Deutsche Bank.

When Deutsche started cutting jobs to cutting  jobs, Woods politely asked his boss to lay him off.  He got his wish in August.

• Slideshow: Recession-Proof Jobs
"After receiving my severance package I turned around and wrote a check to the brewery for beer I had recently brewed," says Woods. "I've set out now to bring my organic, naturally caffeinated yerba mate ale to the masses.”

Cheryl Del Castro wasn’t about to be a recession victim, either.

Source: offtheleash.com Sherri Cappabianca

"I chose to reinvent myself," says DelCastro. "Turning a negative into a positive was my mission in becoming a 'mompreneur.' "

She used her experience raising three children and came up with a baby sock with an adjustable Velcro strap, which prevents children from removing the sock. Eighteen months later, the socks are a national hit.

"I knew I could find a promising future in spite of the economic times,” she says.  “So many people are now reinventing" themselves. Whether going back to school or changing industries,  we are reassessing  our direction and purpose in our lives.”

One thing Maxine Tatlonghari knew how to do was raise money. But instead of raising it for the American Cancer Society as she'd done  for 11 years, she began to do it for her own startup company, Vanity Girl Hollywood, which she launched in February.

"While I was upset at the time, I now see it as a chance of a lifetime," Tatlonghari says. "I was always an entrepreneur at heart, and this gave me a much-needed kick in the pants to get my business off the ground."

Starting a small business, particularly in the midst of a recession, is a huge gamble.

Only two-thirds of them survive two years, according to the Small Business Administration. That survival rate falls to 44 percent at four years, and to 31 percent at seven years.

The National Federation of Independent Businesses estimates that over the lifetime of a business only 39% are profitable, while 30% break even or lose money.

But such daunting statistics are not enough to dissuade some when jobs are few and hard to find.