Source: White House
“Startup America [is] a national campaign to help win the future by knocking down barriers in the path of men and women in every corner of this country hoping to take a chance, follow a dream, and start a business.”
-President Barack Obama, January 31, 2011
The Obama Administration is taking concrete actions to improve the environment for high-growth entrepreneurship, in five key areas:
- Unlocking Access to Capital
- Connecting Mentors
- Reducing Barriers
- Accelerating Innovation
- Unleashing Market Opportunities
So far, these new policy initiatives include encouraging private sector investment in startups using tax incentives and the Small Business Investment Company program, allowing entrepreneurs to request faster review of their patents, supporting mentorship programs for Veteran entrepreneurs and cleantech entrepreneurs, and funding regional collaborations that accelerate the commercialization of new technologies.
Expanding Access to Capital for Entrepreneurs
SBA Launching Two $1 Billion Initiatives for Impact Investing and Early-Stage Seed Financing
The U.S. Small Business Administration (SBA) will commit up to $2 billion as a match to private sector investment over the next five years in promising high-growth companies. Using existing authority, at no new cost to taxpayers, and the operating infrastructure of the Small Business Investment Company (SBIC) program, SBA-guaranteed bonds will match capital raised by licensed privately-owned and managed investment funds, and provide long-term patient capital to accelerate high-growth firms.
- $1 Billion Impact Investment Funds: SBA will commit $1 billion to funds that target areas of national priority, including underserved markets and emerging sectors such as clean energy and education. The program will focus on funds interested in generating not only financial returns but also “social” returns. Impact Investment SBICs must invest fifty percent of their total capital in impact investments, defined as place-based or sector-based investments. SBA will provide up to a 2:1 match to private capital raised by these funds, partnering with private investors to target impact investments. Learn more.
Status: SBA licensed the first Impact Investment Fund in Michigan, providing up to $130 million in capital to high-growth businesses.
- $1 Billion Early-Stage Innovation Funds: Early-stage companies face difficult challenges accessing capital, particularly those without the necessary assets or cash flow for traditional bank funding. For high-growth companies, the gap is particularly acute in the so called “Valley of Death” for financing rounds between $1-4 million. Over the past 4 years only 6% of all venture capital has been deployed in that stage, with 70% of the financings going to only three states – California, Massachusetts and New York. The Early-Stage Innovation Funds will target this gap, providing a 1:1 match to private capital raised by early stage seed funds. Learn more.
Status: Launching in Fiscal Year 2012.
Administration Proposes Permanent Elimination of the Capital Gains Tax on Certain Small Business Stock
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides a 100-percent exclusion from tax for capital gains realized on the sale of certain small business stock held for more than five years. The amount of gain eligible for the exclusion is limited to the greater of $10 million or ten times the taxpayer’s basis in the stock. This provision applies to qualified small business stock issued after December 31, 2010, and before January 1, 2012. The Administration’s FY12 budget proposal would make this provision permanent, increasing private sector investment in small businesses. Learn more.
Status: Part of the President’s budget for FY2012, awaiting Congressional action.
Treasury Department Simplifies Rules for $5 Billion in Tax Credits for Private Investment in Lower-Income Communities
The Treasury Department has published a set of proposed regulatory reforms to the existing New Markets Tax Credit, which the Administration is proposing to expand from $3.5 billion to $5 billion in its FY2012 budget proposal. These reforms will make it easier for community development entities to attract private-sector funds for investment in startups and small businesses operating in lower-income communities. The reforms would relax the reinvestment requirements for community development entities investing in certain operating businesses. Learn more.
Treasury Dept. Convenes Access to Capital Conference for Entrepreneurs
The Treasury Department hosted a March 2011 conference on “Access to Capital: Fostering Growth and Innovation for Small Companies.” The conference brought together policymakers, entrepreneurs, investors, academics, and other market participants to explore how both the public and private sectors can help promote access to capital at each stage of growth for a small company – from seed capital, to growth equity, to accessing the public markets. Learn more.
Status: Conference complete; ideas under consideration.
Connecting Mentors and Entrepreneurs
SBA, Department of Energy, and ARPA-E Launch Mentorship Program for Clean Energy Startups
The SBA, in partnership with the Department of Energy (DOE) and Advanced Research Projects Agency-Energy (ARPA-E), launched the Entrepreneurial Mentor Corps program in February 2011. This program funds four competitively selected clean energy business accelerators — Clean Energy Trust, CleanTECH San Diego, Cleantech Open, and the Nevada Institute for Renewable Energy Commercialization — which together match experienced mentors to 100 clean energy companies around the country. These mentors accelerate a startup company’s success by providing targeted advice on revenue growth, employee growth, avoiding pitfalls, and obtaining financing. Learn more.
Department of Veterans Affairs Launches New Incubators to Help Vets Start High-Growth Businesses
The Department of Veterans Affairs (VA) has established two of the first integrated business accelerators focused solely on helping our Veterans launch and sustain their own businesses. The first accelerator program is a brick-and-mortar facility in Milwaukee, Wisconsin. Veteran Entrepreneurial Transfer (VETransfer) is a non-profit business incubator providing physical office space and shared services to help Veteran-owned businesses get off the ground. The second program is a virtual, online business accelerator focused initially on Veteran entrepreneurs in Roanoke, Virginia and Philadelphia, Pennsylvania. The VetSuccess Employment Accelerator (VetSEA) will provide a suite of online tools and resources that assist Veterans in all phases of the entrepreneurial process, from assessing their skills readiness to developing a business plan to launching and building a new company. Learn more.
National Science Foundation Launches Center for Teaching Innovation and Entrepreneurship in Engineering
The National Science Foundation (NSF) has awarded a $10 million grant over five years to launch a national center for teaching innovation and entrepreneurship at the nearly 350 engineering schools throughout the U.S. Directed by the Stanford Technology Ventures Program (STVP) at Stanford University’s School of Engineering, in partnership with the National Collegiate Inventors and Innovators Alliance (NCIIA), the center will serve as an education, research and outreach hub, inspiring the nation’s undergraduate engineering students to develop innovative products and services for lasting economic and societal impact. Learn more.
Department of Energy Funds Clean Energy Business Competitions for Students Nationwide
To support and empower the next generation of American clean energy entrepreneurs, U.S. Energy Secretary Steven Chu announced $2 million in funding for the National University Clean Energy Business Challenge. This nationwide initiative will create a network of regional student-focused clean energy business creation competitions whose winners will compete for a National Grand Prize at a completion held at the Department of Energy in Washington, D.C. in early summer 2012. The funding will support up to six regional competitions that will inspire, mentor, and train students from across the country to develop successful business plans to create a new generation of American clean energy companies. Learn more.
Administration Commits to Advance Entrepreneurship Education
The Departments of Education and 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 Department 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. Learn more.
Reducing Barriers and Making Government Work for Entrepreneurs
Department of Homeland Security Announces New Initiatives for Immigrant Entrepreneurs
The White House has released a Blueprint for Building a 21st Century Immigration System, including President Obama’s support for legislative measures that would attract and retain immigrant entrepreneurs seeking to create jobs here in the U.S., such as the Startup Visa Act, strengthening the H-1B program, and “stapling” green cards to the diplomas of foreign-born science, technology, engineering, and math (STEM) graduates, as part of comprehensive reform. At the same time, the Department of Homeland Security (DHS) has outlined a series of policy, operational, and outreach efforts to realize the potential of current immigration laws to attract the best and brightest from around the world to grow the U.S. economy and create American jobs.
- Clarifying Entrepreneurs’ Eligibility for the EB-2 National Interest Waiver Program. U.S. Citizenship and Immigration Services (USCIS) has released new materialsthat clarify the standard for entrepreneurs of “exceptional ability” and those who qualify for a national interest waiver (NIW), which streamlines the application process for an EB-2 green card and allows entrepreneurs to self-petition. USCIS will couple these public materials with internal training on the unique characteristics of startup companies, as informed by the stakeholder engagements detailed below. Learn more.
- Clarifying Entrepreneurs’ Eligibility for H-1B Visas. Companies obtaining H-1B visas for high-skilled employees must demonstrate an employer-employee relationship. USCIS has updated its public materials to provide clarity on the H-1B eligibility of entrepreneurs with an ownership stake in their own companies, including sole employees, who may be able to establish the necessary employer-employee relationship. Learn more.
- Reinventing the EB-5 Investor Visa Program. The EB-5 program allows immigrant investors to put their own capital to work creating jobs and opportunities for U.S. workers. USCIS is reinventing the program by (1) adding premium processing for certain EB-5 petitions, (2) implementing direct lines of communication between petitioners and USCIS adjudication teams, and (3) providing petitioners with the opportunity for an interview before a USCIS panel of experts to resolve outstanding issues. Learn more.
- Expanding the Premium Processing Program. To assist employers in quickly obtaining high-skilled employees, USCIS will expand the existing premium processing service to new visa categories, including the EB-5 for investor-entrepreneurs (see above), and the EB-1 for multinational executives and managers. Premium processing enables employers to obtain expedited processing of their petitions within 15 calendar days, for an additional fee of $1,225. Learn more.
- Engaging Entrepreneurs to Streamline the Visa Process. U.S. Citizenship and Immigration Services (USCIS) is launching an “Entrepreneurs in Residence” (EIR) initiative to fully realize the job-creating potential of current immigration law, beginning with policies and practices related to immigrant entrepreneurs. Informed by summits with industry leaders to gather high-level strategic input, the agency will bring in a tactical team comprised of entrepreneurs and experts, working with USCIS personnel, to design and implement effective solutions at the policy, training, and officer level. Learn more.
- Engaging Entrepreneurs as Core Stakeholders in a 21st Century Immigration System. USCIS routinely holds stakeholder engagements for a variety of interest groups, and will for the first time conduct outreach specifically to the entrepreneur community on an ongoing basis. These engagements will provide USCIS with valuable stakeholder feedback on how job-creating entrepreneurs and startup companies can make use of existing visa categories. For detailed information on USCIS’s public meetings, please visit www.uscis.gov/outreach.
- Embracing More of the World’s Best and Brightest Science and Technology Graduates. The Department of Homeland Security has published an expanded list of science, technology, engineering, and math (STEM) degree programs that immediately qualify eligible graduates on student visas for an Optional Practical Training (OPT) extension—an important step forward in expanding the nation’s pool of talented high-skilled graduates and potential entrepreneurs in science and technology fields. By expanding the list of STEM degrees to include such fields as Neuroscience, Medical Informatics, Pharmaceutics and Drug Design, Mathematics and Computer Science, more highly skilled foreign graduates will have an extra 17 months to remain in the U.S. to pursue work training in their field of study, beyond the initial 12 months available to all graduates. Learn more.
Top Administration Leaders Go on National Tour to Support Public Participation in Removing Barriers to Entrepreneurship
The President issued an Executive Order to federal agencies to identify and take steps to eliminate or reduce processes that are outdated or overly burdensome to entrepreneurs. As part of this effort to receive feedback from entrepreneurs on the front lines, the Administration launched online suggestion tools for the public and went on the road for “Startup America: Reducing Barriers” roundtables in Durham, Boston, Minneapolis, Austin, Atlanta, Pittsburgh, Boulder, and Silicon Valley to hear from entrepreneurs about the challenges they face, share current Administration efforts to support entrepreneurship, and to streamline or eliminate the biggest barriers to startup growth. Learn more.
Status: Roundtables complete; entrepreneur feedback under consideration by relevant federal agencies.
White House Convenes Urban Entrepreneurship Forums Across the Country
Recognizing the critical role of entrepreneurship in creating jobs and economic opportunity within America’s cities, the White House Business Council is convening a series of urban entrepreneurship forums in cities across the country, connecting local entrepreneurs to the public and private resources and networks that can help them grow and succeed. The series kicked off in Newark, New Jersey in June 2011, and has been to New Orleans, Atlanta, and New York City. Other planned stops include Orlando, Philadelphia and Oakland, with more locations to be added throughout 2012.
White House Engages Young Entrepreneurs
As part of President Obama’s focus on job growth for America’s young people, the White House Business Council is convening a series of conversations across the country with young entrepreneurs in collaboration with the U.S. Small Business Administration and local partners. The first convening, held in New York City in May 2011, gathered 300 youth advocates and entrepreneurs to discuss creative thinking and best practices for starting a business and creating jobs for young Americans. In July 2011, top officials met with 150 youth entrepreneurs at the White House, gathering feedback on how the Administration can best support their growth and success. Later in the year, the Young Entrepreneur Series convened military veterans in San Diego, California; rural entrepreneurs in Ames, Iowa; minority entrepreneurs in Charlotte, North Carolina; Native American entrepreneurs in Tahlequah, Oklahoma; and more young entrepreneurs in Milwaukee, Wisconsin.
Reducing Student Loan Burdens for Young Entrepreneurs
President Obama has announced new executive actions to make it easier for Americans to manage student loan debt, including a “Pay As You Earn” proposal to let upcoming graduates cap their monthly federal loan payments at 10% of their income, with any remaining debt balance forgiven after 20 years. Entrepreneurs with student loans can already take advantage of the Administration’s income-based repayment (IBR) plan, limiting loan payments to 15% of their income and forgiving all remaining debt after 25 years. To spread awareness of this program, the U.S. Small Business Administration has launched a new website walking young entrepreneurs through the process of reducing their monthly student loan payments, and the U.S. Department of Education has committed to developing new guidance for borrowers to facilitate young entrepreneurs’ use of this program. Learn more.
SBA Launches One-Stop Website for Small Business Innovation Research (SBIR) Funding Opportunities
Through the Small Business Innovation Research (SBIR) program, the federal government provides $2.5 billion in annual seed-stage funding for small businesses meeting national research needs. The U.S. Small Business Administration has reinvented the SBIR.gov website with new features allowing these innovative companies to navigate opportunities across eleven federal agencies. Entrepreneurs can now benefit from search across all open solicitation topics, search of past awards, transparent reporting of agencies’ annual performance, a unified calendar of events across all agencies, and guided walk-throughs for various constituents. Learn more.
U.S. Patent & Trademark Office (USPTO) Plans to Increase Applicant Control Over Examination Timing and Enable Fast-Track Examination Reaching Final Disposition Within 12 Months
The USPTO is pursuing an Enhanced Examination Timing Control Initiative (Three-Track Examination) to give innovators more control over the timing of application processing and support a more efficient market for innovation. Under this initiative, applicants would be able to request prioritized examination for a fee (Track I), obtain processing under the current procedure (Track II), or request a delay in processing and fees of up to 30 months (Track III). Entrepreneurs who are seeking capital or accelerated market penetration may benefit from the prioritized examination offered by the Track I option. In contrast, entrepreneurs wishing to test the market before committing further resources may prefer the extended timeframe associated with Track III. Three-Track will help all entrepreneurs by creating shorter overall examination queues. Currently on hold due to budget constraints, USPTO will announce a start date for Track One as soon as circumstances permit. Learn more.
Status: “Track I” launched. Learn more.
U.S. General Services Administration Launches “Business Breakthrough” Program
To help foster continued business opportunities, GSA created Business Breakthrough — a program to help businesses better understand the intricacies of the Federal marketplace and GSA’s contracting vehicles and take advantage of opportunities for growth. GSA’s Business Breakthrough will offer companies a robust workshop agenda full of up-to-date information on how to successfully navigate government contracting. Representatives from GSA and industry will provide information and guidance including real-world case studies from across industries. Learn more, or find a Business Breakthrough session near you.
SBA Launches Apps for Entrepreneurs Challenge
Entrepreneurs and small businesses need better tools to navigate the Federal government’s vast resources – including programs, services, and procurement opportunities. Apps for Entrepreneurs challenges programmers to develop these tools using open government data, with $20,000 in prizes. Learn more.
Accelerating Innovation from Lab to Market
National Science Foundation Launches Innovation Corps
Fostering a national innovation ecosystem that couples scientific discovery with technology development and societal needs, the National Science Foundation (NSF) has established the NSF Innovation Corps, a public-private partnership that will connect NSF-funded scientific research with the technological, entrepreneurial and business communities. Technology developers, business leaders, venture capitalists, and others from private industry will act as I-Corps mentors, enhancing the ability of primary researchers to transform their scientific and engineering results into successful, fundable technologies. In partnership with the Deshpande Foundation and the Kauffman Foundation, NSF I-Corps will initially support up to 100 projects per year, at $50,000 per project. Learn more.
Commerce Department’s Economic Development Administration (EDA) Launches “i6 Green” Challenge for Regional Innovation
EDA’s i6 Green, implemented in partnership with six federal departments and agencies, builds on the success of the inaugural i6 Challenge in 2010. This program, with anticipated funding up to $12 million, is designed to encourage innovative, ground-breaking ideas that accelerate technology commercialization, new venture formation, and job creation across the United States. The 2011 “i6 Green” challenge focuses on both regional economic development and environmental sustainability, rewarding communities that utilize Proof of Concept Centers to accelerate technology-led economic development in pursuit of a vibrant, innovative clean economy. These centers will be supported by regional partnerships that draw upon a wide range public, corporate, university, non-profit, and philanthropic stakeholders. Learn more.
Department of Energy Launches “America’s Next Top Energy Innovator” Challenge
Energy Secretary Steven Chu announced a new program called “America’s Next Top Energy Innovator” to reduce the cost and paperwork for startup companies to license the Department of Energy’s 15,000 unlicensed patents, and start bringing more of these new energy technologies to the U.S. marketplace. Entrepreneurs can apply for any of these patents by submitting a business plan for how they propose to use them. A portfolio of up to three patents will cost an upfront fee of just $1,000, yielding a total savings of between $10,000 and $50,000. Learn more, or browse new technologies.
Sixteen Federal Agencies Launch “Jobs and Innovation Accelerator Challenge” to Spur High-Growth Clusters
The Department of Commerce, in coordination with sixteen federal agencies, has created the $33 million Jobs and Innovation Accelerator Challenge, spurring growth in 20 regions around the country. High-growth clusters from rural and urban regions across the nation will compete for federal funds to promote robust economic ecosystems and the development of a skilled workforce, both of which are critical to long-term regional success. These awards will leverage additional private capital from sources including foundations, financial institutions, corporations and other private-sector partners. Learn more.
National Science Foundation Announces “Accelerating Innovation Research” Awards
The National Science Foundation (NSF) has invested $9.2 million to turn science and engineering research into commercially viable products and services. Through the Accelerating Innovation Research (AIR) program, academic researchers and their students develop proofs of concept to successfully launch their innovations into the marketplace. Successful projects will attract follow-on investments from the private sector. Learn more.
Inventing a New Patent System
The America Invents Act was passed with President Obama’s strong leadership after nearly a decade of effort to reform the Nation’s outdated patent laws. It will help companies and inventors avoid costly delays and unnecessary litigation, and let them focus instead on innovation and job creation. Many key industries in which the United States leads, such as biotechnology, medical devices, telecommunications, the Internet, and advanced manufacturing, depend on a strong and healthy intellectual property system. The law will give the USPTO the resources to significantly reduce patent application waiting times, building on the great strides the patent office has already made, including reducing its backlog by 75,000 during this Administration even as the number of filings per year has increased. Learn more.
Department of Energy Funds Innovation Ecosystems
DOE’s Innovation Ecosystems Initiative is funding 5 “innovation ecosystems” that accelerate the movement of cutting-edge energy efficiency and renewable energy technologies from university laboratories into the market. Located in five distinct geographic regions across the United States, the university- and nonprofit-led Innovation Ecosystems unite the strengths of experts in universities, business, finance, government, research institutes, and economic development organizations. These consortia provide clean energy technology innovators and entrepreneurs with services in intellectual property protection and business mentoring, as well as opportunities to compete for venture capital and other financial investment partnerships. The five ecosystems are University of Central Florida, University of Utah, Clean Energy Trust, Fraunhofer, and University of California – San Diego. Learn more.
USPTO Launches Small Business Innovation Research Pilot Program
The United States Patent and Trademark Office, in collaboration with the National Science Foundation, is piloting a program to provide Small Business Innovation Research (SBIR) awardees with comprehensive intellectual property support through the agency’s small business programs and resources. Learn more.
A New Online Resource to Speed Commercialization of Technologies
In support of the President’s goals for the Advanced Manufacturing Partnership, the federal Manufacturing Extension Partnership (MEP) will launch a new searchable, web-based resource to assist manufacturers, tech firms, and entrepreneurs to turn more of their ideas into products and businesses. Integrated into the National Institute of Standards and Technology (NIST) MEP website, the site will enable businesses and entrepreneurs across the country to easily identify and contact more than 2,000 public-private organizations and initiatives designed to assist them. The site will profile more than 900 organizations that offer capital, intensive entrepreneurial support, technical assistance, and access to new markets. Among the users will be NIST MEP’s more than 1,400 technical experts located around the country who are focused on solving manufacturers’ challenges and identifying opportunities for growth. They will use the resource to improve the economic standing of the more than 34,000 manufacturers they work with annually, resulting in new sales and investments. This web resource will bring together in one place information that is currently scattered across the country.
Status: Launching in 2012.
Unleashing Market Opportunities
Administration Expands Startup America “DC-to-VC” Summits on Health Care, Clean Energy, and Learning Technologies
DC-to-VC summits are targeted engagements between senior Administration officials and entrepreneurs, investors, and students in communities across the country. The goals of DC-to-VC engagements are to communicate how the President’s policies and priorities are unleashing new market opportunities for entrepreneurs, to inspire more entrepreneurs to pursue these opportunities, and to gain valuable policy feedback from the innovation community.
- Health care: The President’s commitment to improve our health care system is creating massive new opportunities for innovators and entrepreneurs. The Affordable Patient Care Act creates unprecedented incentives for new information technology (IT) platforms that reduce costs, reduce errors, and increase the quality of care. DC-to-VC: Health Care has hosted numerous events across the country since 2010, led by the Chief Technology Officer of the Department of Health and Human Services, targeted at innovators in health IT, care delivery, and other technologies. Learn more.
- Clean energy: The Administration’s historic $80 billion Recovery Act investment in clean energy research, development, and deployment is accelerating breakthrough technologies and new market opportunities for a safe, clean, and secure domestic energy infrastructure. Led by the Under Secretary of the Department of Energy, DC-to-VC: Clean Energy launched in March 2011 to identify ways the Administration can help accelerate private sector efforts in this important area. Learn more.
- Education: The Administration’s $4.35 billion Race to the Top initiative as well as the $650M Investing in Innovation (i3) Program have helped drive important state and local educational reforms and unleash new market opportunities for learning technologies. Learning is transitioning from the traditional print-based classroom experience to incorporating a digital learning environment inside and outside the classroom, where new platforms, customized learning, and multimedia content promise to dramatically improve teaching and learning. Led by the Assistant Deputy Secretary for Innovation and Improvement and the Director of the Office of Educational Technology at the Department of Education, DC-to-VC: Learning Technologies is planning a series of events in 2011 and beyond. Learn more.
Startup America Policy Challenge
In the spirit of open and participatory government, the White House is using 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.
Innovation Exchanges Provide National Platform for Health IT Collaboration
Innovation Exchanges are special coordinated forums that match early-stage innovators with adopters of health information technology (IT). The Administration is encouraging these innovators and healthcare organizations to pilot new technologies and host research and development together. These Innovation Exchanges are happening across the country, including Philadelphia, Indianapolis, San Diego, San Francisco, and Boston. Learn more.