(FORTUNE Small Business) – The Comp Crunch

Last year California saw workers' compensation rates rise as much as 40%, and that's expected to continue in 2001. Don't live in California? You might still have to fork over a lot more. After a decade of falling rates, prices are starting to creep back, partly because of rising medical costs. We can expect low double-digit percentage increases over the next couple of years nationwide, says Insurance Information Institute chief economist Robert Hartwig. But that doesn't mean you should rush to shop for a new carrier. "You're going to be facing similar increases no matter which carrier you use," Hartwig says, "so your biggest bang for the buck is going to come in by improving your safety record." Creating workplace safety committees or hiring a loss-control firm can help.

Finally, if your policy is up for renewal, check your company's stability with a ratings group like Moody's or A.M. Best. If your insurer doesn't score an A or better, it may indeed be time to shop around.

Power Squeeze?

Worried about energy costs? Here is some advice from our Answer Men columnists, David Martin and Jeff Levine: First, look at where you will see a big impact. Are your suppliers well positioned to maintain pricing or service, or will they have cash-flow problems due to increased costs? Will your landlord pass along his increased utility costs? Who are your customers, and will they have to cut their purchases because of a cash squeeze? Do you need to change your pricing, and can you pass increased costs along to your customers? Will that scare them away? This is the kind of thinking that's essential to your business, Martin and Levine say.

Easy Money From Yale

Attention local New Haven startups: Professor David Cromwell of Yale University's School of Management has money for you. Cromwell is managing a $1.5 million venture capital fund called Sachem Ventures. He launched it with investments from Yale and other sources. The goal is to invest $75,000 to $125,000 in local startup and early- stage businesses over the next three years. The fund's multiple missions: create returns for investors (no surprise), build jobs and wealth in the community (that's a surprise), and give the MBA students assigned to work with these ventures an opportunity to get their feet wet. So far the venture fund has invested $100,000 in Higher One, a company that provides financial services to the higher-education market.

Regional Champs

Thanks to Manhattan's Silicon Alley, the greater New York area attracted more venture capital investment last year than its bitter rival: New England. According to the National Venture Capital Association, Silicon Valley placed first, capturing 32.5% of the total $59.4 billion. Well behind was the Empire State, which hauled in 11.8%. But that was enough to edge out New England, which brought in about 10%. Which regions saw the greatest growth? The Rocky Mountain and Great Plains states.

Helping the Small Get Big

Silicon Valley Bank, in Santa Clara, Calif., is trying to drum up business internally by launching a series of dog-and-pony shows for its startup clients. After picking startup customers who are ready for a first round of funding, the bank coaches them on the ABCs of business plans, public speaking, and giving presentations. They're invited to launch into a two-minute pitch in front of other customers and investors. So far the showcase panels have included partners from Angel Investors, Band of Angels, and the Venture Law group, which are prepared to invest half a million to $1.5 million in the first round. What's in it for the bank? "We want to help small customers become big customers," says Mark Horn, a senior vice president of Silicon Valley Bank, who admits the concept helps create "incredible client loyalty."

Reported by Jennifer Keeney, Jeff Levine, David Martin, and Louise Rosen