We Can’t Wait: Obama Administration Announces $2 Billion in Resources to Support Job-Creating Startups
Today, the White House announced administrative and private sector actions that will help entrepreneurs grow their businesses and create jobs by increasing their access to capital and resources. The U.S. Small Business Administration (SBA) is moving forward with launching a $1 billion Early Stage Innovation Fund, originally announced as part of Startup America, which will provide matching capital to Small Business Investment Companies (SBICs), targeting early-stage small businesses seeking private institutional capital. Today, the White House is also hosting the first board meeting of the Startup America Partnership, where board members will announce commitments from more than 50 private-sector partners to deliver over $1 billion in value – from free software to free consulting and legal services – to 100,000 startups over the next three years. The President also renewed his call for Congress to work on a bipartisan basis to develop ideas from his American Jobs Act plan that will help our small and growing businesses access capital while continuing to protect investors. Specifically, the President has called for increasing limits on “miniofferings,” allowing “crowdfunding,” and phasing in some requirements for small firms as they go public.
“Today, we’re announcing $2 billion in public and private resources to help entrepreneurs start and grow their businesses. Now it’s time for Congress to do its part. It was encouraging to see members of both parties in the House come together to pass legislation that will help small businesses get ahead, and I’m calling on the Senate to do the same. But America’s small businesses can’t wait for these important tools to grow and hire faster,” said President Obama.
The Early Stage Innovation Fund will leverage the successful SBIC program to allow privately managed investment funds to put more capital into the hands of small business startups. SBA is acting on this commitment by proposing a modification of its rules allowing private funds that invest in early stage companies to participate in the SBIC program. The proposed modifications are now up for public display, and the fund will be fully implemented in 2012. Today’s announcement is the latest in a series of executive actions the Obama Administration is taking to strengthen the economy and move the country forward because we can’t wait for Congress to act.
The Startup America Partnership is a nonprofit alliance of entrepreneurs, major corporations, and service providers committing private-sector resources to accelerate the growth of new companies. The Partnership, led by iconic entrepreneurs like Steve Case (AOL) and Reid Hoffman (LinkedIn), was launched earlier this year in response to the President’s call to action to dramatically increase the success of America’s high-growth entrepreneurs. New startup businesses create most of the net new jobs each year, in every industry and all across the country.
In September, when the President announced his American Jobs Act, he called on Congress to take steps to help small businesses raise the funds they need to innovate and grow. He urged Congress to work on a bipartisan basis to develop these ideas in ways that will help our small businesses while continuing to protect American investors.
- Regulation A “miniofferings:” Small businesses owners who are seeking private capital of less than $5 million are currently exempt from a variety of regulations. The President has called for raising that limit to up to $50 million, while still protecting investors, in order to make it easier for small companies to raise the capital they need to grow.
- Crowdfunding: Already, nonprofits have harnessed the power of online fundraising and social media to help meet their mission. In a similar way, we can allow entrepreneurs to raise money from many small-dollar investors, while also modifying the rules to build in strong investor protections to these new platforms.
- Easing costs for small, young firms: Research shows that most job creation for public firms occurs after they go public. By phasing in certain regulations for small, high-growth firms, we can provide a transition period to help these companies ramp up to the full costs of being public, while still protecting investors.
Additional commitments announced today include:
- Startup America Policy Challenge. In the spirit of open and participatory government, the White House will use online platforms to ask entrepreneurs and the broader public how to accelerate entrepreneurial innovation in three priority industries: healthcare, clean energy, and education. Students and other solvers will then compete to translate the best ideas into “Policy Business Plans,” which will be shared with relevant Cabinet Secretaries from the Depts. of Health and Human Services, Energy, and Education.
- Administration Commits to Advance Entrepreneurship Education. The Dept. of Education and the Dept. of Labor are advancing a youth entrepreneurship agenda that infuses entrepreneurship education into a range of existing programs involving K-12 education, career and technical education, community colleges, universities, and low-income youth. As part of this effort, the Dept. of Education is launching a new National Education Startup Challenge, inviting middle school, high school, and college students to develop an innovative solution to an education problem and prepare a business plan for a new company or non-profit organization to deliver that solution.
- NFTE Expands Entrepreneurship Education for Underserved Youth. The Network for Teaching Entrepreneurship (NFTE) provides a first-class entrepreneurship education for at-risk high school students from low-income communities. Today, NFTE and the Pearson Foundation are launching Connect, a free online community for teacher collaboration and training focused on entrepreneurship education, fulfilling a commitment made at the launch of Startup America earlier this year. The Connect community is open to all educators who want to infuse entrepreneurship education best practices into their classroom, with a goal of at least 5,000 registered educators in the next 24 months. In addition, SuperCamp/Quantum Learning Network, one of the top academic summer camp providers in America, is partnering with NFTE to making its BizCamps widely available to young people across the country.
- Junior Achievement Announces Entrepreneurial Reinvention. Junior Achievement, the nation’s oldest and largest youth entrepreneurship program, is announcing a historic reinvention of its century-old JA Company Program to be more contemporary and relevant to today’s dynamic entrepreneurial landscape. Supported by global technology leader Emerson, this program is designed to reach at least 50,000 students over the next five years.
- Over 100 Community College Presidents Commit to Entrepreneurial Transformation. The National Association for Community College Entrepreneurship (NACCE) is launching the Presidents for Entrepreneurship Forum, through which community college presidents make specific commitments to advance entrepreneurship and the impact these colleges have on the economic well-being of their communities. Over 100 community college presidents have signed on at launch, with the goal of at least 600 by the end of 2012, comprising around half of all community colleges in the U.S.