Knowing the significance of innovation startups on the prospects for growth in the US economy, we started asking leaders of startup companies about four years ago how their businesses are performing, whether they are hiring and which policies will continue to enable their growth. We call it the Startup Outlook survey, and have found it very helpful in engaging policy and business influencers in productive conversations about supporting high growth companies in the innovation sector.
This year, more than 750 startup executives responded to our survey from companies nationwide. We will release the initial report in a few weeks, and will be combing through the data and releasing deeper insights into particular issues over the course of the next few months.
In light of the presidential inauguration, however, we looked at responses to one particular question first: "What piece of advice would you give to President Obama with regards to supporting the innovation economy?" It turns out, simplifying taxes and focusing on building a strong talent pool made up nearly half of all responses, which came from 600 comments by CEOs and executives of startup companies across the country.
They said things like, "cut the red tape," "simplify the tax code" and "improve US science and math education to best-in-world outcomes."
High growth small companies, while small in number, have an outsized impact on the U.S. economy. They consume roughly 0.1-0.2% of U.S. GDP in invested capital, but turn into companies that create roughly 11 percent of U.S. private sector employment and 21 percent of U.S. GDP – or roughly twelve million jobs and over $3 trillion in annual revenues. Given their outsized impact, we aim to help make it as easy as possible for these companies to succeed.
Nearly one-third of startup managers who participated in the survey, commented on taxes. "Uncertainty is a lousy environment for business," a CFO of a growing software company said.
Nearly 20 percent of the respondents believed the government should focus on developing a deep talent pool through a combination of approaches including immigration reform and better science and math education. We hear this over and over when we speak to our clients.
A running theme in the comments was also the desire for government to work together on a bi-partisian basis, and we agree.
More detail about Startup Outlook and the advice startups are offering for the next presidential term, are available at svb.com/startup-outlook-report/. We look forward to your thoughts, as well as your participation next year.