Entrepreneurs, Start-Ups and the American Economy: Celebrating National Start-up Day Across America

It’s Start-Up Day Across America – so we visited awesome starts-ups here in the Northern Virginia today as part of the annual celebration of U.S. Start-Ups by Members of Congress and others that was started in 2013 by Congressional leaders and American entrepreneurs, Representative Jared Polis and Representative Darrell Issa. We visited both new companies like @ZoomData as well as established companies who have a “start-ups within” culture like @CapitalOneLabs. 

America’s entrepreneurial ecosystem is the envy of the world. Every day, entrepreneurial Americans grow and scale their dynamic businesses across the country. And, there are ways we can continue to support – and grow – that talent.

It’s why President Obama signed 18 small business tax cuts into law; re-upped and improved the $1.5 billion State Small Business Credit Initiative; reduced student loan burdens for entrepreneurs; is negotiating a strong trade deal that protects U.S. businesses, empowers more entrepreneurs, and expands exports; and most recently hosted the first-ever White House Demo Day. 

The event featured over 90 entrepreneurs and 30 companies hailing from Wisconsin to Arkansas and from Oregon to Puerto Rico. Entrepreneurial companies from all over the Nation set up demo stations in the State Dining Room, the foyer, the Diplomatic Reception Room… we even had an all-electric, all-terrain smart rover outside the landing on the East Wing. (You can watch President Obama as he toured some of the exhibits. And if you want to join the innovative mayors around the country who are making it easier for businesses to get off the ground by streamlining licensing and permitting, you can read about Startup in a Day.)

The event was a display of what’s possible in our country. Because, while America is already the best place on the planet to start and grow a business, the reality is that we are still leaving too much talent on the bench. Entrepreneurs across our country start businesses every day, and we need to do more to make sure all of them can take advantage of the ecosystem that’s currently accessible only for some of us.

Most venture funding is only deployed in a select number of metro areas despite data that shows almost all parts of the country produce great companies. Just three percent of all venture funding goes to women-led companies. Pause on that for a second: three percent. And, just one percent of all venture funding goes to African-American founders. Pause on that for a second: one percent.

So, here’s a quick thought exercise: if you think that only a tiny percent of the profitable ideas will come from over half our population, then maybe the status quo is rational. But if you agree that there’s a lot of talent beyond those small percentages, then it’s clear we are missing significant return on investment by not engaging all of our entrepreneurial talent. The Tech 2020 initiative from the Congressional Black Caucus has underscored the economic opportunity of making sure that we are tapping into talent across the country, regardless of background.

In every state and territory, there are people with skills and scalable ideas. We just need to make sure that the opportunity doors are open and resources access is really there for everyone.

That’s why Demo Day at the White House focused on inclusive entrepreneurship – sharing the entrepreneurial journeys of people from a broad range of backgrounds, industries, and many zip codes to demonstrate what they have created, and to show these extraordinary role models for what’s possible when people have the opportunity to get involved in starting and growing innovative companies.

And here’s the thing: when teams are diverse, those teams do better. Inclusive entrepreneurship and innovation is profitable. In business – and in tech – a body of data is emerging:

• First Round Capital (investor in startups like Square, Wanelo, Warby Parker, and Uber) recently examined a decade’s worth of data from their portfolio of 300 companies, and found that startups with at least one female founder performed 63 percent better than all-male teams. The data also showed that women are present in the top ranks of their ten most valuable companies. (First Round)
• They also found that companies they invested in that they discovered through channels other than referrals – like Twitter or demo days – outperformed referred companies by 58 percent. (First Round)
• Meanwhile, public “companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.” (McKinsey)

The argument is simple: a diverse workforce isn’t just the right thing to do, it’s also the smart thing to do for product quality and shareholder return on investment.

Many leaders from industry, academia, venture capital and government are stepping up with new commitments to diversity – from work to broaden the tech talent pipeline to bringing in best practices in hiring with things like variations on the Rooney Rule.  Taking a page from the NFL, companies are pledging that there will be at least one person of color and one woman considered on every senior hiring slate.

If your company or organization is doing something specific and measurable to increase diversity, we’d love to hear about it at startup@ostp.gov.

And today -- August 19th – let us know using hashtag #StartupDay what companies and entrepreneurs you are celebrating on this 2015 Startup Day Across America!