Gov’t Support for Startups: My Seat at the Table
I was browsing Change.gov’s new Open Government feature over the weekend, where the incoming Obama administration is posting all proposals submitted to them by special interest groups, something that’s never been done before. And a step that bodes well for a more open, transparent government (21st century government in the 21st century, who could’ve imagined?).
So I came up with my own little list from my own little RedPost perspective. The caveats being: 1) I didn’t check to see if anyone’s come up with these ideas already, as someone probably has, and 2) I have no idea if they’re feasible or not. But I leave that to our hopefully-competent government-type people to figure out.
How the Government can help startups, from a startup’s perspective
Funding
- Close the gap between Angel investors and Venture Capitalists — SBA loans are too big and too low risk, they don’t work to fill this gap. Small-fund initiatives like Y Combinator could help. Smaller SBA loans that tolerate higher risk could also help.
- Match state granting funds: Indiana’s 21st Century Fund gives out several 10s of millions of taxpayer money every year to deserving, innovative companies. Match it at the federal level!
- Match state tax credit funds: Indiana has a great 20% tax credit for angel investors (I’m sure other states have the same). Invest $10,000, get a $2,000 tax credit with the filing of 2 forms (one before, one after). Super simple, a great tool for fundraising. Match it at the federal level!
- Income tax credits or 100% depreciation write-offs don’t help if you’re not generating income yet. What about federal payroll tax credits/deductions for new payroll generated? As in, if you create $50,000 in new payroll from one year to the next, you get a 5% credit on your FICA matching taxes? This would help, a lot!
Jobs
- Recruiting for startups, especially those not in big cities, is difficult. One great resource is colleges and universities — recent grads are willing to work harder and work for less, especially if they’re engaged in the work. But every university has it’s own job website and career center. Create a national database of jobs for college grads that all public universities have to use (or are incentivized to use). Private universities can opt-in. If there’s one standard system, instead of submitting job openings to 100 websites, you’d submit to one. The same with internships. This wouldn’t take a lot of money or be that difficult to implement. Several private companies have tackled this market, but it really needs a single, unified system to work. Tie resume collection into this website. Make it consistent across the country.
- Promote broadband everywhere (I know you’re already talking about this): if startups can hire people wherever they are because there’s good broadband all over, we can pay less for employees who live in lower cost of living areas where they want to live…and the employees can earn more (when you factor in cost of living).
Economic development everywhere, not just in major cities:
- Connect urban and rural centers through better public transportation. You should be able to live in a small town and (gasp!) NOT own a car. It’s near impossible right now. But initiatives like the Midwest Rail Initiative would really help (I’m sure there are others). The plans are there, there’s just no funding for implementation. Connect us to each other!
- Promote quality of life in small town, denser urban development by funding matching grants for Main Street programs and BID districts. Very little money goes a long, long way in small towns…we run 18 days of First Friday events here in Goshen on less than $40,000/year, including a paid director, marketing materials, music venues, website…everything. And have grown to over 30,000 additional visits per year as well as spurred real estate investment and new and old businesses locating to our urban core.
Ok, that’s it. My 2 cents.
