If you turn on almost any news channel, you’ll hear a consistent theme coming from Washington policymakers — jobs, jobs, and more jobs. People in D.C. recognize how vital job creation is to our future. By and large, they understand that small, growing companies are the engine for job creation.
However, when we talk to entrepreneurs, it’s clear their reality is very different from the one implied by Washington’s rhetoric. We rarely hear about all the things lawmakers are doing to make it easier for growing businesses to succeed. Usually, it’s the opposite — more in the range of disinterested skepticism to resigned acceptance to overt frustration.
We believe that, the majority of legislators really do want to enact policies that promote small businesses and create jobs. But we also agree that, in too many cases, they miss the mark.
For better or worse, our political system magnifies the voices of large, established businesses and minimizes the voices of startups. (We’re not alone … there are a lot of other voices that also don’t get heard.) Large businesses have the time and resources to devote to DC; they employ huge numbers of people (Read: voters), often across the country; and they have entire groups devoted to making the case for their policy priorities. The innovation sector, by and large, doesn’t have any of this. In addition, disruptive change is scary. And if you’re a politician whose job depends on making it through the next election, backing scary, disruptive change is hard.
That’s where Miami comes in. If you know anything about U.S. policy towards Cuba, you’ll know the United States has maintained a very rigid, very broad embargo for the last half-century. Why? Not because it’s easy — in fact, many would embrace the opportunity to travel to and do business with Cuba. It’s because a group of people cares passionately about maintaining the embargo. The Cuban community isn’t huge. But it’s very focused, it knows what it wants, and it absolutely, positively shows up and speaks up.
For the past year and a half, we at SVB have been working to show up and speak up for the innovation sector. We work closely with other groups with complementary interests, including those from the venture community and those from the tech community. We try to give voice to the specific needs and perspectives of smaller growth companies. And we try to help legislators understand the breadth and depth of innovation across the country and the incredible promise offered by our clients — in energy, health care, communications, IT and other sectors.
Sometimes, we think the government should take affirmative steps — invest in infrastructure, invest in R&D, help address the financing needs of cleantech companies crossing the “valley of death,” and adopt sound education and immigration policies, to name a few. Sometimes we need them not to act — to reject ideas that, while perhaps well-intentioned, would do more harm than good. Neither happens automatically.
Even during the last 18 tumultuous months, there’s been some good news. Just the other day, for example, the National Telecommunications and Information Administration (NTIA) announced that California will receive $205 million in broadband funding. Earlier this summer, in the financial reform bill, Congress permanently exempted small cap companies from some Sarbanes-Oxley burdens and beat back proposals that would have made it harder for startups to raise money. Recently the Export-Import Bank (Ex-Im) updated its U.S. Content Policy in a way that will enhance small businesses’ access to export credit support. (Click here to learn more about how we work with Ex-Im to help clients with export credit needs.)
But there’s still a long way to go. Far too many members of Congress don’t understand what our clients do or the impact they can have on U.S. economic and job growth. Far too many don’t understand what policies make sense if we really want to promote startups and growth companies.
I’ve highlighted a few issues we’re working on. Click on the title of an issue to let us know what you think and add your voice to the mix.
The New Democrats’ “Innovation Agenda”: In 1997, a group of pro-business members of the House formed the New Democrat Coalition. Today, it’s 60 members strong, a potentially influential, moderate group (including some former VCs or former entrepreneurs) that understands the tech sector and works actively on issues from trade to energy. They have developed an Agenda for Innovation and Entrepreneurship that proposes a series of ideas grouped around the themes of investing in people, investing in ideas, and helping companies compete and win. They’ve asked for our views and those of our clients as they’d like to identify the most important ideas so they can enter the next session actively working on some concrete ideas that would make a real difference. Click here to see their agenda. We’d love to hear what you’d put at the top of their list. I also recommend that you read this perceptive summary of the intersection between policy and the venture-backed innovation economy and the work SVB is doing to give entrepreneurs a voice in DC.
The Startup Visa: Designed to reverse the current immigration situation, in which we send talented non-U.S. entrepreneurs away and effectively force them to start their businesses abroad, the Startup Visa would take an existing, underutilized visa category and make it available to entrepreneurs who raise capital, start a company and create jobs. We’re big fans of the idea. If you’d like to learn more or add your voice to the effort, go to http://startupvisa.com/.
CA Ballot Proposition 23: Whether or not you live in California, and whether or not you’re in cleantech, you should watch this one. Four years ago, California became the first state to cap greenhouse gas emissions across all sectors of the economy. The California law has helped give cleantech investors and entrepreneurs the kind of long-term visibility and certainty they need. But now, two oil companies based in Texas are backing a ballot initiative to suspend the law indefinitely. We think it’s a bad thing for the tech sector if well-heeled incumbents who benefit from the status quo can unwind years of work and de-stabilize an entire sector. We’re in the “No on 23” camp. We recognize others’ views may differ, but we strongly encourage people to inform themselves on this issue, take a stand and, if they live in California, vote.
Device Companies: Our life science/medical device clients face real problems in navigating the 510(k) clearance process and the premarket approval (PMA) process. Senator Klobuchar of MN has asked for our views on what’s not working, and what could be done to fix it. We’d love to hear your thoughts.
Navigating the New Health Care Law: Of course, while many ideas die during the legislative process, some don’t. And then we all need to figure out how to deal with the new regime. We’ve spent a lot of time trying to figure out the new health care law and if it was hard for us, we can only imagine what it’s like for a smaller startup. So we’ve posted on our Web site some thoughts about how to think through what’s right for your company in light of the new law.