Business & Education | Startup Act for Growth

In July, the Kauffman Foundation unveiled a detailed proposal for new legislation designed to encourage more successful small business startups to jumpstart the US economy.

Called The Startup Act, the proposal asserts that a strong, sustainable US economic recovery will require:
  • More high-growth companies
  • A stream of new ideas capable of being commercialized
  • Fewer roadblocks to launch and grow startups
  • Low-cost capital available to fund startups

How would The Startup Act work? The proposal identifies four pivotal changes to prompt more startups:

1. Encourage targeted immigration
  • Welcome immigrants capable of building high-growth companies
  • Provide entrepreneurs’ visas and green cards for those with degrees in science, technology, engineering and math (STEM)
2. Provide financing
  • Provide better access to early-stage financing
  • Create capital gains tax exemptions for long-held startup investments
  • Provide tax incentives for startup operating capital
  • Facilitate access to public markets
  • Allow shareholders of companies with a market cap below $1 billion to opt-in under the Sarbanes-Oxley Act
3. Accelerate commercialization
  • Expedite the formation and commercialization of new ideas by creating differential patent fees to reduce backlogs
  • Provide licensing freedom for academic innovators
4. Eliminate barriers
  • Remove barriers to business formation and growth
  • Create automatic ten-year sunsets for all major rules
  • Establish common-sense and cost-effective standards for regulations
  • Assess state and local startup and business policies

The Startup Act has implications for both business and education. It seeks to move concepts from the laboratory to the marketplace at a quicker pace and with less red tape. This should appeal to both business people and educators, since it offers an opportunity to leverage and monetize taxpayer-funded research conducted in American universities.

Is this the ultimate plan for reestablishing a vital American economy and a more conducive small-business startup climate? No, but it could be a step in the right direction.


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