Obama announces $2bn package for US start-ups
Monday, December 12, 2011/
Start-ups in the United States will gain increased access to capital and resources, after US President Barack Obama announced a $2 billion package to aid budding entrepreneurs.
The US Small Business Administration has launched a $1 billion Early Stage Innovation Fund, providing matched capital to early-stage small businesses seeking private institutional capital.
The SBA is a government agency that provides support to entrepreneurs and small businesses. The agency’s activities are often referred to as the three Cs: capital, contracts and counseling.
The Early Stage Innovation Fund, which will be fully implemented next year, will allow privately-managed investment funds to put more capital into the hands of start-ups.
The government has also hosted the first board meeting of the Startup America Partnership, a private organisation helping young companies succeed in order to accelerate job growth.
Board members announced commitments from more than 50 private sector partners to deliver more than $1 billion in value – from free software to free consulting and legal services – to 100,000 start-ups over the next three years.
Obama has also renewed his call for Congress to help develop the ideas of the American Jobs Act, which will help small businesses access capital while continuing to protect investors.
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.
“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,” Obama said in a statement.
Additional commitments announced by the government include:
Startup America Policy Challenge
The government 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.
The government will incorporate entrepreneurship education into a range of existing programs involving primary, secondary and tertiary education.
Community college commitment
The National Association for Community College Entrepreneurship is launching the Presidents for Entrepreneurship Forum. This will allow college presidents to make specific commitments to advance entrepreneurship.
Australian business strategist Paul Wallbank says it appears as if the US government is tweaking existing programs rather than introducing new ones.
“Still, it’s good to see there is at least recognition of the role new businesses play in the economy rather than fixating on old, failing industries,” Wallbank says.