Barack Obama Loves Startups: New Federal Office for Early-Stage Entrepreneurs
This post is part of our ReadWriteStart channel, which is a resource and guide for first-time entrepreneurs and startups. The channel is sponsored by Microsoft BizSpark. To sign up for BizSpark, click here.
According to a Bloomberg report this morning, early-stage startups have a new friend in very high places.
The U.S. Commerce Department is establishing a new Office for Entrepreneurship and Innovation specifically to help entrepreneurs develop great ideas into workable business plans by giving them training, funding, advisement, access to data, and a big pair of federal-sized scissors for cutting through the red tape of starting a new business.
The office is being announced by Secretary of Commerce Gary Locke, who has a track record of supporting entrepreneurship. Earlier this month, he examined a backlog at the U.S. Patent Office that was holding up many applications for years. "This has a direct, negative impact on America's economic competitiveness, creating uncertainty for entrepreneurs and inventors," he said.
And in light of America's current economic crisis, he echoed remarks made by Obama in a speech given on September 21st. The President cited a need for more federal support of innovation and entrepreneurship at a time when the country is reelying from "cycles of boom and bust." Lock said, "Instead of working to build a great company or discover a new invention, too many of our brightest minds were busy engineering credit-default swaps."
Locke will direct the new office in supporting entrepreneurs and startups through the coordinated efforts of many government programs and entities.
We look forward to reporting more on this office as news becomes available; however, we also acknowledge that not everyone agrees with the President's economic initiatives. As members of the American startup community, how do you feel about the likelihood of more federal involvement in our sphere? Is the government's help, including possible grants or loans, welcome?
Let us know your opinions in the comments.
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Count me in! Those who innovate are passionate about their thoughts and work. And it has to work. That's engineering's value add. Keeping it simple addresses complexity so to avoid crisis, just K.I.S.S. (!)
Best wishes for money well spent. Let's do something useful for folks who need their food, clothing and shelter. Supply enthusiasm, demand performance. Innovate in waves.
I say keep the gov't out of as much as possible. This will all run on tax-payer money. Why should the tax-payer be forced to essentially make loans to entrepreneurs? As a tax-payer, I would need to review every business plan and background before lending someone money.
How do they plan to pay back the tax-payer for loans that are defaulted? What kind of compensation do I, the venture capitalist in the scenario, receive for successful start ups? The gov't needs to stop taking taxes and redistributing wealth. Leave my tax dollars in MY pocket so I have capital to run MY business!
LAME!
Well, I don't disagree with everything Obama does and this is definitly not one of them. I have a few investments going but the problem is advertising it. I just can not afford to advertise the traditional way. I'm having to learn SEO, Internet Marketing, and I just got a grant of $6000.00 to go back to school for Digital Design at Art Institute of Pittsburgh Online Division.
I basically make little to no money doing with these invested websites like http://ges.debtfreerights.com which simply helps the $10,000+ unsecured debt relief information. Its totally free for anyone and funded by Obama's sitmulus package. Problme again is traffic of people whom seriously need this relief!
I'm also invested in 5 fortune 500 companies but yet again trying to get targeted prospects of people whom truely need these services is crippling me because I just don't have the money invest in such advertisment. I could really use some grant money to help with this and if this is true. It is most certainly welcomed. I'll gladly pay taxes on this to help other like minded people to get them started.
I'm also a Civil Drafter out of work because of the economic down turn. I've been trying to promote my skills but it always falls back down to "Sorry, but we've went with someone with more experience". Thats not a good feeling when you hear something like that and having to try to battle someone for a Pizza Hut job is making it even harder to get a real job... And the money I made while drafting for Oil and Gas Companies is running seriously low.
Sincerely,
George S.
I happen to think this is great! I'm glad I finally found time to catch up on the news.
So, wait, the US federal government is... taking money... and giving them to people... so that the people can therefore make more money.
And therefore pay more taxes.
And therefore fund even more startups.
You mean the government can actually invest money wisely? A Democrat-lead government, even? This is the real world, right?
Hah, I voted for the right man after all.
@Adam:
The entirety of your post is pure conjecture at this point. Fail.
What Adam says is absolutely ridiculous. The entire purpose of government is to protect and defend the general good of the people whom it governs. We are taxed so that the gov't can perform that exact purpose, and that is what our tax money will be going to in this venture. If, like he says, every business plan had to be reviewed by every single tax payer, then nothing would ever be accomplished, and we would plummit into second-world status! Our foreign competitors are outstripping us by leagues and if we don't do something to catch up, we're going to be in a lot of trouble as we enter this next and very crucial decade in our history. The President is doing exactly what he is supposed to do- protecting and defending our welfare- and part of our welfare rests upon our economy, which, in America more than anywhere, depends upon our innovativeness and our ability to always be moving forward, taking risks and thinking independently. If the government can not only minimize the risk, therefore encouraging the taking thereof, but also maximize the likeliness of success through key loans (ala that guy in India who won the Nobel Peace Prize, just in a totally different spectrum) and counseling, it will be maximizing our chances of success as a country as we head into the next decade. This is a great idea, and as long as it is properly executed, is an excellent use of my tax dollars, and anyone else's for that matter.
Adam:
Of course! This anonymous "taxpayer" that you talk about doesn't want to pay for anything at all. They should not be forced to pay for any of the country's infrastructure, or for its future going forward. If this "taxpayer" you speak of were to carry that "thinking" -- for lack of a better word -- to its logical conclusion, we'll end up with a completely stagnant, uncompetitive country. That taxpayer, through refusing to help move the country forward into the next century, will drag it back into previous centuries, and end up costing themselves far, far more than the taxes would have.
I'm getting into my second small business now. Believe me, I'm no fan of taxes either. But this idiocy coming from the ultra-conservatives has got to stop. It's so uneducated and historically ignorant on its face that it's laughable.
Nor am I a fan of all of Obama's policies. This move by one of his cabinet members, however, is smart. Nurturing small businesses gets us back to the economic roots that helped make our country successful once; it likely can help get us back on our feet again.
Stop staring at your own feet and grousing about taxes and start looking at what's going on around you.
Best things they could do for early-stage entrepreneurs:
1) Help get rid of the 100s of forms you have to fill out, crazy rules and regulations that make no sense, etc. It seems like my life is paying lawyers and filling out forms.
2) Eliminate all taxes/fees on new startups until they're up and going. Wouldn't it be great if incorporation were free instead of costing a much of money? (I know that's not federal). Wouldn't it be great if you didn't have to pay payroll firms to handle payroll taxes in tons of separate states? Entrepreneurs could focus on their businesses instead of the gov't all the time.
We already have more startups than the marketplace can sustain. We don't need the government to create more. Really. We just don't.
I supported Obama's campaign because I believed in many of his goals, especially health care reform. But now I'm starting to wonder if his detractors might be right -- the government seems to be expanding it's influence far too quickly and far too carelessly. With so many other important issues on the table, this latest initiative seems like a really bad idea at an absolutely awful time.
@Adam Johnson: Right on! What has the government ever done that was great for the people and enterprises? Oh, BTW, have you heard of this thing called the Internet?
I am more than happy to have my taxes used to encourage entrepreneurship, even if it is going to make some people who are not me richer. So what? It is good for the economy, thus it is good for employment, thus it is good for everyone, except maybe for the shortsighted Libertarians who cannot think outside of their selfish little bubbles, and who want to contribute as little as possible to the community but are more than happy to take advantage of our government funded infrastructure (including our road system and the Internet, invented with government money... now THAT was innovation), national park system, NIH research, and a billion other positive things. The government is the only entity that has the scale to promote this kind of programs. Sometimes the government does not do it right, but often it does; this is one of these times. The more we encourage people to become entrepreneur, the more wealth we are going to build, and the more we are going to reduce crime, sickness, and other ailments.
Sounds like a plan that the French would cook up... We need a smart, Ivy educated entrepreneurship 'czar' to evaluate and encourage the best ideas.
Oops Maybe I said too much... Truth tends to be stranger than fiction.
Best quote:
"a big pair of federal-sized scissors for cutting through the red tape of starting a new business."
It takes a big pair of brass balls to claim that they are 'helping' when they are helping with a problem they themselves cause. Here, look at me, a kerchief for where I bloodied your nose-- see what happened there, I've done you a favor.
A great way they could actually help entrepreneurs, and by that I mean ALL people willing to put their own money at risk to start a business venture, is to back up. The fact that they choose which ventures to invest in, with tax money of course, invites corruption, has almost none of the incentive of private investment, and is just outside their sphere of expertise.
This is both a fail waiting to happen, and another intrustion even further into free enterprise. What's new.
Earlier this week I published a White Paper on the issue of the Decline of the VC Industry and What the Government Should Do About It. This action by the Commerce Department is right on point. The Government should be working hard to promote new business formation and getting risk capital into the hands of entrepreneurs. Small and emerging businesses, particularly the technology start ups are our future and we shouldn't leave this important part of our economy in the hand of the VC community! And, I say that with respect, since I cam a VC. Check out my White Paper at: http://www.amplifierventures.com/tabid/237/Default.aspx
well as long as it doesn't end up like our social security system lol.
Innovation my a**. I am a PhD in computers on H-1B Visa. I have been unable to find any work and anything that I find suitable to my background would not take H-1B. I know of several other people in similar situations who have spent several years doing PhD here in the hope that they will be rewarded with their hard work. But this administration's hard stance on H-1B has put them together with other software professionals in H-1B row. They are gradually leaving the country. According to NCR survey more than 50% of computer science PhD graduating from US universities are foreigners. Unless something is done to rectify the situation and keep these minds in USA, good luck finding the research talent here.
This stuff never works. The best thing the government can do is stay out of the way and stop interfering. What the heck is the government going to "train" entrepreneurs on?
No, the best things the government can do are to reduce tax rates, cut health care costs with tort reform, regulation of drug companies and insurance firms, put some common sense into the h-1b visa policy, and take about 10,000 pages out of the tax code. Oh yes, and repeal this idiotic Sarbanes-Oxley bill.
Entrepreneurs need clear incentives, less regulation, and less red tape.
I'm afraid training by some government zipper-head is a non-starter.
RB
Do we really think that the Commerce Department can run a venture slush fund without political influence and outright corruption? This is not the responsibility of the U.S. government, it is another avenue for the political class to expand their control of the economy.
Danger! Danger!
I'm from Europe, where governments and the EU regularly come up with this sort of crap.
Please take it from me that they don't work. They're an opportunity to
a) signal that the government loves business, without actually doing something that genuinely helps business - like cut taxes.
b) give jobs to a lot of business advisers, who have never actually run a business.
This scheme is precisely the sort of scheme that left wing governments launch with a grand fanfare. Look at us, we appreciate entrepreneurship! A little down the road, it's forgotten and millions have been wasted.
As the fellow once said "the nine words any small business owner dreads to hear are "I'm from the government and I'm here to help."
How is it that anybody could think this is a good idea? In every country where this has been tried, the best case scenario is that it leads to corruption of the process, subsequent loss of transparency to conceal the corruption, and then a crowding out of honest capital investment to worthy start-ups.
Those of you who think this is a good idea: haven't you ever met a lifer government employee? At the DMV? The Post Office? With no way for them to honestly share in the rewards from commercial success, they will fall into corruption or simply sabotage anything that remotely resembles dynamism.
We dont need this. The government has already created more than its share of economic disasters than any good. That huge TARP hoax, nothing but propping up wall street. None of them hit the ground hard. They all had soft landings courtesy of the US taxpayer. I am not going to get into the whole "govco should stay out of our business" stuff because its a given. Its a default. That is the way it should be. We should have let wall street fail and the weaker banks fail and there would certainly have been companies and people to pick up the pieces. That is the way it should have been. But we never learn.
Now we have more stimulus billions committed (but not even spent) and the "media" is screaming about the end of the recession. So, with only 4% of the stimulus spent - lets NOT spend the rest of those billions and stop being selfish against our kids and grandkids' futures.
Lets stop WASTING time and energy on health care debates that NO ONE WANTS. Let the illegals go back to their home country for health care - since their governments "give them health care" and the US is the "only nation that doesnt"... Hmm.. thats why we have so many illegals here? Thats why everyone from Europe and Canada jam packs the "Cleveland Clinic"?
What about all those people (like my neighbor) who do not WANT to participate in their employer's health care plan?? Why should I have to pay for his and his family's health care? He chooses to go on vacation 3x per year. Good for him. I dont really care what he does but do NOT tell me that he is one of those "30-40 million" without health care because he is NOT. He CHOOSES not to participate. The Congressional Budget Office will report these numbers and facts properly but no one wants to discuss that. Why allow facts to get in the way of a good scam?
But, ok, there are so many people that WANT national health control. So, ok. Here is MY request: ALL of Congress and ALL of Obama's administration and Obama himself and his wife and kids - ALL of them will go on this plan too. When you eat your own medicine, I will strongly consider it for me and my family. Until then - no effin way. Their REFUSAL to even discuss it is proof enough that I dont want it either.
Lets stop this nonsense and start focusing on the cancer that has affected our nation: OUTSOURCING of jobs and manufacturing.
Lets address this disease now. Obama needs to focus on creating JOBS. I cant stress this enough. Obama needs to focus on creating JOBS. Obama needs to focus on creating JOBS. Obama needs to focus on creating JOBS. Got it?
When people have jobs, they can AFFORD health care. When people are not UNDER employed, they can afford health care and everything else. Why is it that these corporations get to outsource our skilled labor to nations where they're paying the equivalent salary of a Borders employee...someone working at Target...a Starbucks manager? WHY?
First of all, there is NO cost savings being passed down to the consumer. Second, the quality of the products and services received from these outsourced laborers SUCKS. And that is putting it nicely. "Made in China" = "piece of crap". And do not even think of denying that. We've all seen the quality of our products decline. We've all seen the horrendous packaging of our products. This outsourcing experiment is a complete FAIL.
Obama needs to pay attention to what is going on within this nation's borders and ON the borders as well. Our national security is dependent on our nation having a sufficient workforce. We cant ALL work for the government and we DONT all want to work for the government. GovCo = FAIL. Anyone who has stood in line at the USPS can tell you this. Anyone who has gone to DMV or knows about the fraud and waste in Medicare and Medicaid can tell you this. Anyone who has finally come to grips with the fact that Soc Security is BROKE can tell you this.
We need LESS govco involvement. We need LESS people like John Kerry spouting out that they DO NOT READ the Bills before signing them. He's admitted he's a fraud. FIRE that failure now. Fire ALL of them.
Mr. Obama: we do not want you to prop anyone else up. Start doing your job and start watching this nation's security from domestic and foreign threats. Not that you've now exposed the Eastern Seaboard to nuclear ICBMs from Russia. Not that you're wasting your time and energy and MY MONEY campaigning for this national health control crap that you wouldnt have the SENSE to put your own kids into. Just like you wouldnt put your kids into the FAILure of our nation's public school system.
You better get to work because so far, you've done nothing to help this nation and once Pelosi and Reid are FIRED in 2010, you're next in 2012. There will be no health control and there will be not global warming HOAX taxes.
The socialist experiment FAILED in the Soviet Union and somehow you want to bring it here? Have you studied this nation's history and the events that led to the FIRST American Revolution??? I think not because you've set into motion the exact same events and the conditions are now RIPE inside this "petri dish" of your national socialist experiment for the creation of a new set of leaders and founders. I never thought I'd see this in my lifetime but should our government ever be overthrown - I wouldnt be shocked in the least.
Stay out of our lives and our business. Startups do NOT want money from the government - who, by the way, in case you didnt know, doesnt have a PENNY to their name. Its the PEOPLE'S money and the PEOPLE's everything. And you've completely lost ALL of our trust.
I am getting unemployment as I start my new venture as a cause-branding consultant, uniting non-profits and private corporations by assessing the potential contributions of each, negotiating agreements, and maximizing relationships. The result is a deep and lasting partnership that is mutually beneficial. This helps support the good work of the non-profit community while effectively building–or rebuilding–the trust and respect of the corporate sector.
So my contribution promises be profound. But the program that allows me to collect unemployment was very difficult to qualify for and it isn't included in any increases in unemployment funding, which I could really use to get up and running.
Obama should learn about these programs so he can help to support them.
Do you think a great idea or two may have been passed over?
A great way they could actually help entrepreneurs, and by that I mean ALL people willing to put their own money at risk to start a business venture, is to back up.
First, Mike, this has zero to do with health care, so this isn't the place for us to debate that.
As for those saying this has failed elsewhere, I wonder about, oh -- the Small Business Administration? Adam, do you think you should review every business plan of applicants to the SBA for assistance?
As for those saying Onama's socialist, here's a good article to read:
http://www.dailyfinance.com/2009/09/19/one-year-later-are-we-socialist-yet/
Or, you could just look the word up in the dictionary.
I think having a clearing house to assist entrepreneurs is *great.* It won't affect me personally, but if folks could get their ventures off the ground it would help the whole country -- including in the form of tax revenues.
Boosting support for innovation and entrepreneurs is #AWESOME.
However, there's a few things to keep in mind:
1. Keep an on this new new 'office' in the years to come
2. We don't need a bloated bureaucracy
3. Remember: "Less Government in Business and More Business in Government"
I agree with Ethan. Everyone should keep an eye on this one. Government does have a role - it sets the rules whether we like it or not. Step one is to get them to understand the difference between passive small businesses and growth entrepreneurs. Perhaps this step signals an effort to do that. Step two is the most important. It is about who staffs the efforts. Put people in there who have gone through a successful start up and a successful exit. They know what our job creators and entrepreneurs do and do not need. As Mark said above we need a smart savvy entrepreneurship Tsar to ensure that we do not repeat the EU experience where bureaucrats conceived and staffed good meaning efforts to no effect.
As the what - I agree we do not need government finance pools. As to what we DO need - well read my blog at http://www.entrepreneurship.org/PolicyForum/
Tremendous idea. How do we get involved? As a small business, my biggest challenge is getting support for the great work I do!