Two weeks ago was President Obamas second State of the Union address. While there have been mixed reviews regarding the speech overall, there were some positive implications for startups. As part of a mission to win the future by out-innovating, out-educating and out-building the rest of the world the White House launched Startup America on Monday, an initiative designed to encourage the development and success of new startups. The program focuses on increasing funding opportunities for startups and improving entrepreneurial education, with resources provided by both the public and the private sector.
Who is Taking Part?
So far only a few of the tangible details of the program have been announced, but one thing that we do know is that several big name entrepreneurs and companies are getting involved. The Chair of the initiative is Steve Case, co-founder of AOL, and some partners that have already signed on include Google, Facebook, HP, Intel and IBM.
The specifics of how partners will be involved are still mostly unknown, but the general parameters for what they will contribute will include 3 things: creating workshops to educate business owners, bringing entrepreneurship education to institutions of higher education, and funding new businesses.
Facebook has made their role in Startup America more clear with the announcement of their program entitled Startup Days. The program includes 12 monthly meetings around the country to provide early stage companies with engineering and design support on the Facebook Platform. Another contributor to the Startup America program is Tech Stars, a startup incubator that currently has 4 locations in Seattle, New York City, Boston, and Boulder, CO. They have announced a plan to support 10 new incubator locations around the country as part of the initiative, an expansion which they hope will be responsible for the creation of 25,000 jobs.
In addition to encouraging private companies to take a larger role in supporting entrepreneurs, the federal government has also committed to contribute $2 billion in funding for startups over the next 5 years. More specifically, the money has been dedicated to startups with high growth potential, as well as startups inunder servedcommunities. Some companies are also pledging significant funding to startups through the program: IBM has committed $150 million to the program, and Intel has committed $200 million. We hope this is the start of more major funding resources to come, whether from the federal government or private sources, as lack of funding is one of the greatest challenges for startups today. One interesting aspect to watch is how the federal dollars are allocated. With so many startup experts like Steve Case and the Kauffman Foundation getting involved, it seems like they would be much better at choosing deserving startups for the funding than the federal government would.
We are also hoping to see more funding and resources directed toward small businesses and startups that are not considered high-tech. These traditional companies account for about three quarters of all startups in the US, and are clearly a cornerstone of our economy.
While the specifics of the initiative are still being rolled out, the prospect of upgrading our support system for startups should be very exciting for entrepreneurs everywhere.