When news of Google's $1.65 billion acquisition of YouTube rocked the worlds of technology and media, Shawn Livermore began to stew. The serial entrepreneur stared at his home-office ceiling fan. He scribbled ideas on a notepad. Crumpled balls of paper flew into his trash can.

"If this site—if all they can do is throw up some generic videos about their cat falling asleep or some guy dancing on a camera ... I thought, 'Man, I can do much better than this,'" says Livermore, 29.

Then the proverbial lightbulb switched on. A 30-page business plan and months of software development later, Livermore launched Jaudible, a website devoted to true stories told on video, out of a Costa Mesa, California, office park on January 5. Livermore's ambition is to become bigger than YouTube by syndicating content to television and radio stations around the world.

Never mind the seizing up of credit markets or how, during the week of Jaudible's Web launch, the stock market tumbled and economic indicators foretold a recession. Corporate America may be retrenching and consumer confidence plummeting, but many innovators like Livermore remain undaunted as they forge ahead with their startups.

Across the nation, entrepreneurs launch more than half a million new companies every year, even during recessions. Startups fell by 7.5 percent in the early 1990s but barely budged in the 2001 downturn, dipping just 2.6 percent, according to the U.S. Small Business Administration's data on companies with more than one employee.

"During a recession, some entrepreneurial opportunities diminish. But a recession can also create opportunities," says Indiana University professor David Audretsch, director of the Max Planck Institute of Economics and a widely published author of works on entrepreneurship. "It really depends on the situation."

As the marketplace contracts, new products and services might encounter chilly receptions. Reverberations from the subprime meltdown make it harder for new businesses to obtain loans.

But luckily for entrepreneurs like Livermore, who is seeking angel investors, venture capital remains available despite the current turmoil.

Last year, nearly $30 billion in venture funding poured into young companies, according to the National Venture Capital Association, which predicts slightly higher levels for 2008. "Venture capitalists are long term investors. The companies that they invest in today, they're not looking to exit for 7, 10, 12 years," says Emily Mendell, vice president of the trade group.

If a prolonged downturn dampens the market for I.P.O.'s, venture capitalists might have a tougher time cashing out of existing firms and plowing resources into new ones. But that would take time to register, so the funding pipeline likely won't feel any squeeze for another couple of years, according to Mendell. "V.C.'s are still actively looking for new ideas. Now is actually a pretty good time for entrepreneurs to be looking for money."

Economic storm clouds have another silver lining: lower startup costs.