Improving the Entrepreneurial Ecosystem
I've recently met with several universities, nonprofits, and government employees who've all asked the same question: how can we promote entrepreneurship…i.e., job creation? They're all concerned about the poor economy and dearth of jobs.
By contrast, as a New York-based venture capitalist, I can report that almost all of our portfolio companies are desperate to hire talented software engineers, and eager to hire in a range of other roles.
It's a bit surreal to talk with friends in other industries who are having difficulty finding jobs, when in my little corner of the economy, it feels like an oil boomtown.
We could see even more fast-growth tech companies, if the policy environment appropriately reflected the needs of early-stage entrepreneurs. There are a range of organizations that help address some of the policy challenges that the technology ecosystem faces, e.g., the Technology Policy Institute, Information Technology Industry Council, Center for Policy on Emerging Technologies, and Tech Policy Central. They all support making entrepreneurship accessible to those who have the ingredients to become a successful self-starter. In particular, I would guess that all of these organizations would agree with me that one of the simplest, easiest ways to stimulate job creation in the US is revising our immigration policy, e.g., by passing Startup Visa .
Unfortunately I have minimal ability to influence policy directly—I have to leave that to my friends in DC. However, there are a few initiatives that I'm working on in my modest sphere of influence which I think are having a positive impact. If you want to work on similar initiatives, please contact me.
Educating the venture capital/angel community on the city/state resources available to them to build companies. I'll likely organize a Harvard Business School Angels of NY event on this topic in 2012.
- Studying best practices of VCs in supporting portfolio company operational improvement, and implementing them in accelerators, incubators, and other entities supporting early-stage companies. I am now leading a Columbia MBA team on this topic; you can see preliminary results of this value creation study here.
- Encouraging non-US companies to set up operations in the United States. Organizations like Worldwide Investor Network and the US-Israel Business Council are helpful in this area.
- Creating angel groups with other alumni organizations, using Harvard Business School Angels as a template. Alumni of major New York schools (Columbia, NYU) and institutions (McKinsey, Goldman Sachs) would be great starting points.
- Creating a for-profit business with the goal of helping students conduct research projects for businesses, so that they're more connected with potential employers.
- Organizing events for local mid- to large-company CIOs and CEOs to meet technology startups. These types of gatherings would effectively help startups get traction and keep their momentum going.
- Publishing actionable research on topics related to entrepreneurship and job creation. See ffvc.com/topics for a full list of research topics on which I'm working or planning to work.
- Creating a master operating checklist for entrepreneurs. Visualize a grid, with the standard entrepreneurial steps down the y-axis (ideation, market research, incorporation, etc.), and the major industries across the X-axis (in New York, for example: internet, food, retail, fashion, etc.). It would be valuable to have checklists for all of the intersections in this grid. Useful checklists of this type of information can be found on our site, Biztree, Wickedstart,
Goodwin Founders Workbench, American Express Open Forum Crash Courses, StartupToDo,
Entrepreneurcountry, and StartupPlays.
- Organizing entrepreneur pitch nights with high-quality investors focused on special-interest communities, both industries (healthcare, retail, fashion) and affinity groups (Women, Asian-American, Latino, LGBT, African-American). We're working on doing this at HBS Angels. The goal of venture capitalists is to source and fund great entrepreneurs, regardless of personal, industry, or academic background. One of the findings of my research study on private equity and venture capital best practices in deal origination was that investors in private companies get better returns when investing in less popular sectors. There's a strong financial case, not just a policy case, for proactively seeking investments in communities that have not historically received as much venture capital funding.
- Setting up a "seastead" for high-quality entrepreneurs who do not have US visas. The Seasteading Institute is already creating an offshore seastead for non-US citizens who want to build companies in the US. Of course, building residences offshore is quite expensive. A much cheaper option: the UN headquarters in New York is technically located on "international territory". We're looking into seeing if we could seastead on land. (Of course, this is just a hack around bad immigration policy…)
Focusing on these incremental ways to encourage entrepreneurship in the United States will help us create jobs … and create great returns for the investors fortunate enough to invest in the next generation of world class companies.
David Teten is a Partner with ff Venture Capital, Founder and Chairman of Harvard Business School Angels of New York, and a frequent keynote speaker.
Tags: Innovation and Jobs, Next Generation
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