“HOW MIGHT WE INVEST $1 trillion in entrepreneurs over the next ten years?” The Kauffman Foundation asked a panel of policymakers, funders, philanthropic organizations, and other partners this question with the goal of collecting ideas to spur entrepreneurship across America, particularly for undercapitalized business owners.
“The American dream is on hold. Firm creation is at a 30-year low; corporate consolidation is at an all-time high,” according to the resulting report. “We believe that lack of access to capital is a major barrier to increasing entrepreneurial activity in the United States. Entrepreneurial investment is at an all-time low. Financial resources to start a business are not equally distributed, leaving gaps in the market.”
In the U.S. in 2016, 53 percent of venture investment dollars went to California, 13 percent to New York, and 10 percent to Massachusetts; the remaining portion was spread over the rest of the U.S. How can this ratio be changed?
One potential solution is to scale existing programs, such as Venture for America, which places recent graduates in startups; and Code2040, which provides tech opportunities for women and people of color. Another solution is to invest in entrepreneurial ventures to stimulate job creation. For instance, through a program labeled “Job Bond,” government economic development funds would pay back private investors who fund small, growing businesses that create net new jobs.
“There is no single right answer,” write Ross Baird of Village Capital and Bryce Butler of Access Ventures, organizations that presented the report. Still, the report notes, while these ideas still need refinement, they’re important first steps. Baird and Butler conclude, “Entrepreneurship is not just a ‘nice to have’—it’s critical to the success of the American Dream.”
Read “Zero Barriers Moonshot: Could $1 Trillion Restore the American Dream?”