El año pasado, Nueva York, Massachusetts and California together accounted for
84% of total venture capital assets under management in the United States
. And the money continues to flow from investors to the same people in the same places
, further entrenching the yawning geographic divide in this country
One of the most important things a Biden administration can do is elevate the importance of startups, especially as it pertains to Covid-19 relief.
While we encourage relief for small businesses
, we want to ensure that economic support is not only for existing businesses
. The reason for this is simple
: Startups create jobs
. If small businesses are shutting down — something that happens even in the absence of a global pandemic — then we need to make sure we are creating new companies
We can do so with existing PPP funds — more than
$ 130 billion earmarked for small business relief remains untapped
. The federal government should revive that program immediately to help existing small businesses while also prioritizing startups that apply for loans based on their plans to create jobs
. The government should then grant forgiveness for those loans based on how many jobs come to fruition
We are seeing an exceptional rise in new business applications
; these new business owners will require tools and capital to grow and create the kind of jobs that change communities — the next relief package should give it to them
Give more to overlooked regions
Segundo, Covid relief shouldn’t be the same for all economies. The ability of cities and states to recover from this health and economic crisis will differ based on their ability to sustain and grow innovation ecosystems. Case in point: the Great Recession. The event was a calamity for all in 2009, but San Francisco and New York came back stronger than ever. And while much has been written about the very real success that cities like Columbus, Pittsburgh and Detroit have experienced over the last decade in building new companies and luring talent, it will be harder for them to bounce back from another serious downturn since they’re in the earlier stages of this shift to innovation.
With a still powerful stock market, driven by record profits from companies largely based in the coastal tech hubs, it’s clear that we need action to counter this imbalance.
The administration could do that by driving more capital to companies in regions that do not currently attract substantial venture dollars
. Congress should include Sen
. Amy Klobuchar’s New Business Preservation Act in any forthcoming stimulus package
. If passed
, this law would create a program whereby the Treasury Department would partner with states to invest $ 2 mil millones in new businesses alongside private investors in regions investors have often overlooked
. To help drive jobs to underserved communities
, Congress could consider Rep
. Ro Khanna’s idea to launch a STEM-focused Federal Institute of Technology with locations across rural America
At the local level, many states and cities have already designed, funded and implemented efforts to preserve the pre-pandemic momentum of their innovation ecosystems. The most successful should be held up nationally as models to replicate and a portion of federal relief dollars should be directed to further these proven state- and city-run programs.
In Ohio for example
, since March
2020, la JobsOhio Innovation Fund provided nearly
40 early-stage startups with loans of between
$ 250,000 y $ 2.5 millón, saving an estimated
1,200 trabajos. And in Colorado
, the public and private sector launched Energize Colorado
, a multidimensional effort that supports entrepreneurs with loans of up to
$ 20,000, PPE and free mental health services
In the midst of the global pandemic, it’s understandable that people are looking forward to a time when things return to normal. But for many Americans, “normal” wasn’t something worth returning to. President-elect Biden’s administration can seize this moment and create a country where the next generation of entrepreneurs can thrive no matter where they live or come from.