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Obama Announces $2B Fund for Startups

239 points by aba_sababa 15y ago

gallerytungsten 15y ago
If you google the "Early Stage Innovation Fund" this is the first result: Early Stage Innovation Fund - COMING FY 2012 | SBA.gov www.sba.gov/node/15261 Early Stage Innovation Fund - COMING FY 2012. Earlier this year, the President announced the launch of "Startup America," an initiative to support high-growth ... http://www.sba.gov/node/15261 http://www.sba.gov/node/15261 If you go there, you get: <title>Access denied | SBA.gov</title> Seems rather fitting for a government effort. Further digging shows that these funds are really only open to VC firms with $20 million in funds already. http://www.sba.gov/inv/earlystage http://www.sba.gov/inv/earlystage
- jszielenski 15y ago
  What a sham. Obama fail yet again. I can't believe I voted for this guy.
CrazyInu 15y ago
Maybe Obama should stop "investing", we've seen how that turned out with Solyndra, Light Squared, Fisker Automotive, etc. Maybe Obama and the Federal government shouldn't be in charge of "fixing" economic aspects of society, as that is not what the founding fathers of this country intended, and that is not really within the authority of Congress. Government picking winners and losers is a proven way to eradicate innovation and destroy wealth. No thanks.
- mkramlich 15y ago
  > Maybe Obama and the Federal government shouldn't be in charge of "fixing" economic aspects of society, as that is not what the founding fathers of this country intended, and that is not really within the authority of Congress. demonstrably not true. think the US federal postal service, department of treasury, the patent system, right to regulate and tax trade. All of which helps to both "fix", promote and tax economic activity throughout the nation. Also keep in mind that those same founding fathers whose "intent" you seem to want to honor, birthed a country where neither women or black people (for the most part, as slaves) were not allowed to vote. So unless you agree with that original state of affairs, clearly their intent can be wrong or evil, in some cases. And therefore just citing their intent is not sufficient to win an argument.
fleitz 15y ago
$1 trillion for banks, $1 billion for startups, you can really see how important this administration feels startups are. Why not just tell banks, lend half the money we're giving you to startups, instead of using it to prop up your balance sheets.
- shantanubala 15y ago
  The bailout was a mess, but I feel there's some truth to what Kissenger wrote a while back: basically, a leader will never be given credit for choosing between two evils (a possible crisis, or a poorly-executed bailout) because you will never be able to prove with certainty how bad the other option would have been. We have no way to truly know what things would be like without the bailout, and we really ought to think of long-lasting solutions. Like funding startups, right? Frankly, your comparison doesn't make much sense. The administration is making an obvious effort, but there's a big difference between investing in startups and attempting to patch an economy that looks like it will collapse. Investing in startups is quite literally an investment for a future economy. The bailout was a bit of the opposite -- a quick-and-dirty patch up.
  - fleitz 15y ago
    Yeah, one is an accounting trick that penalizes everyone who saved money and the other has a serious chance of working. If startups were important they could have just cancelled the V-22 Osprey program which eats $2.8 billion per year, or ballistic missile defense at $9.9 billion, or DHS at $60 billion. $1 billion dollars over three years is probably less money than the gov't spends on toilet cleaning. It's equivalent to withdrawing from Iraq a week early. Sorry, if I'm unimpressed it doesn't look like effort, it looks like a PR campaign.
    - shantanubala 15y ago
      Yes, but these are all separate decisions with their own (opportunity) costs, aren't they? Think of it this way: Why would the government invest in Facebook or Twitter when there are plenty of people who already have their wallets open? That goes for many tech startups -- YCombinator alone is very beneficial for the government in an indirect way because the government no longer needs to think about funding tech startups -- someone else is already doing it really well for them. So the real necessity for government intervention is for extremely risky and potentially extremely unprofitable ventures that allow for amazing possibilities (think NASA when the US was afraid of the Soviets). Pure scientific research is often this way as well. And even NASA is a small fraction of the federal budget (I remember Neil DeGrasse Tyson repeating "half a penny to a dollar" a lot. So my point is this: startups, research, or pretty much any economy-advancing investments aren't going to exceed the cost of trying to keep people happy. The War in Iraq is an example: we wouldn't be there if we weren't scared 10 years ago. We wouldn't have been eager to go to war unless it made us feel happier or safer or more content. In contrast, how content do people feel when they hear about a space shuttle explosion? Or money "wasted" on research that could be used to feed the poor? Why did we even fund NASA again? Oh yeah, we were afraid. The United States collectively didn't give a crap about space until we imagined the Soviets creating the Death Star before us. I'm not saying any of this is rational. Actually, I really agree with you, but the fact that money is going to startups is a good sign. The quantity is low because nothing will cost more than making people feel happy, safe, and secure right now.
gojomo 15y ago
Let a thousand Solyndras bloom! But seriously, exempting smaller firms and fundraising efforts from costly regulations is a good part of this initiative. Routing public funds through private investors, not so much. While they're at it, they should completely eliminate the wealth tests for 'accredited investor' status. If some fig leaf of 'accreditation' is still needed, it should be experience-based or net-worth proportional. For example, everyone with certain business/economics/legal degrees or certifications (Series 7?) should be 'accredited' as knowledgeable enough for private investing. Or, anyone who has an equivalent amount of money in public investments or government-approved retirement accounts, should be able to invest that same amount with 'accredited' status in private investments.
- kevinpet 15y ago
  The problems with proportional would be twofold: 1. How can the company taking the investment verify that the investor doesn't have other Angel investments? Remember: this is most important from a startup perspective to make sure you're able to do clean funding rounds without dealing with the fallout of non-accredited investors. 2. There's nothing to stop people from repeatedly losing 10% (or whatever percent you allow) on stupid gambles. I'm not convinced that academic credentials would be that useful either. I'd trust someone who's run a plumbing business for ten years far more to evaluate a startup investment than I would your average MBA. I thought it amusing that Swenson talks about university professors as if they are automatically financially sophisticated (one of the few points not backed up by data in Unconventional Success).
  - gojomo 15y ago
    There is nothing to protect someone who is reckless or gullible: they can lose all their money on currently-legal schemes, as well. If an investor provides false/incomplete documentation that their investment qualifies (as an acceptable proportion of their net worth or other 'government approved' investments), then that fraud should be the investor's problem when things go south, not the receiving company. Current 'accreditation' is not verified by the government, but rather asserted to the company/lawyers with enough credibility to convince them. Is someone who inherits a million dollars more qualified to invest $10K-$990K into a risky tech venture than someone who's actually earned $10K-$990K in the same field as that venture? Because that's the logic a dumb-money wealth test suggests.
steins 15y ago
"Specifically, the President has called for increasing limits on “miniofferings,” allowing “crowdfunding,” and phasing in some requirements for small firms as they go public." They are going to ruin a good thing.
- jdavid 15y ago
  you read this wrong. they were going to open up crowd sourcing of funds and make it easier to legally start a company from 'crowd sourced' funds.
wilschroter 15y ago
It's going to be interesting to see how companies themselves deal with the concept of having a slew of shareholders (fiduciary duty, reporting, etc.)
beatle 15y ago
Obama should've done this on the first year of his presidency. And I agree, $2B seems like a low number compared to the bank bailout.
9085 15y ago
If they want to help entrepreneurs then they should give contractors more tax relief. 1099 tax payers get shafted.
3pt14159 15y ago
Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé ... Détestable principe que celui de ne vouloir grandir que par l'abaissement de nos voisins! Il n'y a que la méchanceté et la malignité du coeur de satisfaites dans ce principe, et l’intérêt y est opposé. Laissez faire, morbleu! Laissez faire!! (Trans: "Leave it be, that should be the motto of all public powers, as the world is civilized ... That we cannot grow except by lowering our neighbors is a detestable notion! Only malice and malignity of heart is satisfied with such a principle and our (national) interest is opposed to it. Leave it be, for heaven's sake! Leave it be!")
- rayiner 15y ago
  There have been developments in our knowledge of the market since 1680 (when that quote was uttered).
  - anamax 15y ago
    > There have been developments in our knowledge of the market since 1680 Yes, but the argument for regulation is that said regulation provides more benefits than the incurred costs. Considering how badly regulated markets do.... Remember, regulation is systemic risk.
    - rayiner 15y ago
      Regulation is one solution to market failures. It's not the only solution, but in many cases it works well. The Clean Air Act, for example, has been extremely successful at addressing the negative externalities created by air pollution. Beyond that--the lesson that we're learning from modern economics research is that there are no touchstones. Humans aren't rational actors, the efficient allocation theories are predicated on unrealistic assumptions about the behavior of economic actors and the lack of transaction costs, etc. "Laissez faire" isn't any more of a guiding principle than "big brother knows best." The only way to proceed is empirically--use measurements to determine when government solutions are needed and when market solutions suffice. It's a fairly uncontroversial claim that the market naturally under invents in R&D. It's something you'll see in any basic economics 101 textbook. So why shout "laissez faire" to a government initiative addressing such a market failure?
paul 15y ago
Fixing the immigration and patent systems would be infinitely more helpful (i.e. stop getting in the way).
- anigbrowl 15y ago
  Congress has to do that, the executive branch can't. To the extent that the executive branch is streamlining the existing immigration system, they're being derided as amnesty-offering traitors by the xenophobic know-nothings that want Berlin Wall 2.0.
  - rbanffy 15y ago
    Just as a side note, you really don't want an executive branch that can do that (fixing the immigration and patent systems). edit: sorry if it didn't end up as clear as it should
    - anigbrowl 15y ago
      -
      - anigbrowl 15y ago
        The above isn't meant as a comment - it was a question that was answered by an edit in the grandparent, but I then carelessly edited this instead of deleting it. By the time I noticed the error the edit/delete window had closed.
    - thmcmahon 15y ago
      Works OK for countries with parliamentary democracies.
      - jacques_chester 15y ago
        Parliamentary democracies still have distinct executive branches.
TechNewb 15y ago
Where is the money coming from?
timjahn 15y ago
Throwing $2B at startups isn't going to create a new generation of entrepreneurs. 1. Fix the healthcare system. Right now, you're punished if you don't work for a large company in the sense that you're charged up the wazoo for health insurance. Work for a large company and it's close to free. 2. Fix student loans. One could argue don't go to college but I think we can agree there's some value to good schools. 3. Educate tomorrow's would-be entrepreneurs. A lot of America is taught to go to college and get a job at a large corporation after. Let's shift the perspective. Let kids know that starting your own business is a possibility and not something to be ashamed of.
- anamax 15y ago
  > 1. Fix the healthcare system. Right now, you're punished if you don't work for a large company in the sense that you're charged up the wazoo for health insurance. Work for a large company and it's close to free. No, it's not "almost free". It's paid for by the company. And yes, paying yourself is tax-deductible in many circumstances. I've actually paid for health insurance out of pocket as an "older american". Rent was more expensive. That said, healthcare could be a lot less expensive, but since much of that expense comes from govt involvement, it's unclear why anyone would think that even more govt involvement would help. For example, there are a lot of procedures for which I don't want coverage, but thanks to govt requirements, I can't opt out and pay less. > 2. Fix student loans. One could argue don't go to college but I think we can agree there's some value to good schools. Student loans are one way to pay college costs. The method of payment doesn't actually affect the costs much. Increased student aid seems to increase college cost.
  - rabidsnail 15y ago
    Being cheaper than rent is a pretty low bar.
  - eli 15y ago
    > I've actually paid for health insurance out of pocket as an "older american". Rent was more expensive. I think you were very lucky. As a "young & healthy american," that was not my experience.
useful 15y ago
Nice to see a website I worked on finally get on HN. http://www.startupamericapartnership.org/ http://www.startupamericapartnership.org/
brc 15y ago
Egads - having filled out the application forms for government export grants, I can only imagine all the strings attached, hoops to jump through and everything else. Use the money to pay down the debt and just relax the regulations on capital formation and hiring and let the private sector do the work. And work some type of internet freedom into the constitution alongside freedom to have guns.
deleted 15y ago
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feralmoan 15y ago
$2 Billion is probably all that can be afforded until the bigger political battles can be won - ie: the 1% issue and getting corporate tax back into the public coffers. Quite a gamble to take however that the next generation of public funded Delaware startup corps will realize their longer term tax potential.
idonthack 15y ago
THAT'S SOCIALISM >:(
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omarchowdhury 15y ago
"Google Startup America Partnership participants will be able to use Google advertising platforms like AdWords and Boost and receive a $1,000 Google match for every $1,000 they spend."
mmphosis 15y ago
Meh. Who needs the new economy? http://news.ycombinator.com/item?id=3336286 http://news.ycombinator.com/item?id=3336286
droithomme 15y ago
Oh great so now rather than compete with other entrepreneurs on a level footing we have to compete with companies that are partially owned and funded by the federal government.
sentinel 15y ago
His own money, right?
andyl 15y ago
Let the startup fund be paid for by a tax on patent trolls.
goodweeds 15y ago
Here's my idea, up that to $2T by ending our current wars, forget start-ups, and instead invest it all into installing gigabit fiber to every home in the country. This would assure America's competitive infrastructure edge, and create more market opportunity than we can currently fathom.
jaysonelliot 15y ago
I'm disappointed by the amount of political commenting on this post, as opposed to what I was hoping to find—discussion of how the fund will actually work and how to take advantage of the various elements of the initiative. I'm trying to make sense of the press release, but finding it difficult. It's full of announcements, but seems to be missing any calls to action. There's more information at the SBA - http://www.sba.gov/startupamerica http://www.sba.gov/startupamerica It contains this promising paragraph: "…the gap is particularly acute in the so called “Valley of Death” for financing rounds between $1-4 million. Over the past 4 years only 6% of all venture capital has been deployed in that stage … The Innovation Fund will target this gap, providing a 1:1 match to private capital raised by early stage seed funds." Does this mean that access to money in this fund is only through existing VC firms? Or does it mean something else? If anyone can extract the actionable information from all this static, please do share. It would be great to know if new funding methods were actually opening up, or if this is just an infusion of cash to VCs.
- temphn 15y ago
  It's full of announcements, but seems to be missing any calls to action. Ok. Here is the call to action: hire a lobbyist or ex-Congressman who will get you in front of Startup America. Preferably a large bundler like George Kaiser. They will get you sweetheart loans and endorsements from the President and Vice President. We've seen this dozens of times before when "free money" is available. Scarcity requires an allocation mechanism. In the case of the very similar Qualifying Therapeutic Discovery Tax Credit (QTDTC) from last year, those who lobbied were those who got the bling. http://www.bizjournals.com/sanfrancisco/blog/2010/10/winners_losers_in_race_to_biotech_tax_credits.html Clearly somebody — probably a few thousand somebodies — are going to lose out. ... The takeaway for those biotech companies that miss out on the tax credit, according to Eisenberg: Tell your member of Congress to extend and expand the program. And as with the QTDTC there will be a catch. Failure is criminalized. The failure of Solyndra prompted an FBI raid. What did the executives know and when did they know it? All government "grants" are like this. For example, to get the biotech "Qualifying Therapeutic Discovery Tax Credit" from last year, you had to essentially submit to an IRS audit. http://www.irs.gov/newsroom/article/0,,id=224505,00.html Q5. What type of documentation and records related to the application should applicants maintain in order to satisfy IRS requirements in the event of a future audit of “qualified investment” claims? A. Documentation and recordation should include information sufficient to verify and explain costs treated as qualified investments, e.g., detailed work papers and invoices. Translation: embarrass us and we will retroactively find your definition of "qualified investment" to be at variance with that of the IRS. Bottom line, it is unlikely this program will be substantively different from those preceding it.
electic 15y ago
Death of SOPA > $2B Dollar Fund
Achshar 15y ago
But will they accept foreign startups? Also where can i apply? startupamericapartnership.org does not seem to accept foreign applications.
wavephorm 15y ago
$7 Trillion for the banking cartel and $2 Billion for job creators? Explain that one to entrepreneurial voters next year.
jszielenski 15y ago
So how do I apply? Where is a link to the application?
- useful 15y ago
  http://www.startupamericapartnership.org/get-registered http://www.startupamericapartnership.org/get-registered afaik it basically gives you access to this: http://www.startupamericapartnership.org/search/content?f[0]=bundle%3Aresource http://www.startupamericapartnership.org/search/content?f[0]...
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inaworldofideas 15y ago
Making helicopter drops is destroying the economy not helping, they think innovation comes from the printing press.
joska 15y ago
The sovjests tried this, it did not work. Why should it work now? Central planning of inovation just doesn't work. And in a free society its just not the proper role of goverments to force people to give their money money to central planning, as they them selves make much better investments descisions.
DaniFong 15y ago
I am so frustrated with these government programs that supply hyperactive, startups (Solyndra! Argh!) with too much funding, then crash and sully the reputation of entire fields with their profligate spending and successive failures. The scientific grant system is even worse! With the rate of grants being accepted at 5%, everyone becomes extremely conservative. Many professors spend most of their time fundraising, not doing science. There is a good case that science would be progressing faster with no government funding at all. There are obvious things the government could do to improve entrepreneurship. Like simply not kicking our entrepreneurs out! Stapling a green card to our graduate's diplomas -- the fact that we invest nearly a quarter million dollars in each STEM PHD and then don't let them stay has been a known absurdity for more than decade, yet they still don't fix this problem. Or how about taxing oil and gas like everything else! Even ignoring the trillions of dollars spent policing the persian gulf region, the tax policies surrounding oil amount to an enormous subsidy, making it cheaper in the US than almost anywhere in the world. Simply taxing it would save the budget and dramatically improve prospects for green energy. The list goes on. I'm stunned by the collective incompetence of the government in stimulating startup growth. Maybe there are good, structural reasons for inaction in the short term, but these issues have been around for years!

239 points by aba_sababa 15y ago

If you google the "Early Stage Innovation Fund" this is the first result: Early Stage Innovation Fund - COMING FY 2012 | SBA.gov www.sba.gov/node/15261 Early Stage Innovation Fund - COMING FY 2012. Earlier this year, the President announced the launch of "Startup America," an initiative to support high-growth ... http://www.sba.gov/node/15261 http://www.sba.gov/node/15261 If you go there, you get: <title>Access denied | SBA.gov</title> Seems rather fitting for a government effort. Further digging shows that these funds are really only open to VC firms with $20 million in funds already. http://www.sba.gov/inv/earlystage http://www.sba.gov/inv/earlystage

jszielenski 15y ago
What a sham. Obama fail yet again. I can't believe I voted for this guy.

CrazyInu 15y ago

Maybe Obama should stop "investing", we've seen how that turned out with Solyndra, Light Squared, Fisker Automotive, etc. Maybe Obama and the Federal government shouldn't be in charge of "fixing" economic aspects of society, as that is not what the founding fathers of this country intended, and that is not really within the authority of Congress. Government picking winners and losers is a proven way to eradicate innovation and destroy wealth. No thanks.

mkramlich 15y ago
> Maybe Obama and the Federal government shouldn't be in charge of "fixing" economic aspects of society, as that is not what the founding fathers of this country intended, and that is not really within the authority of Congress. demonstrably not true. think the US federal postal service, department of treasury, the patent system, right to regulate and tax trade. All of which helps to both "fix", promote and tax economic activity throughout the nation. Also keep in mind that those same founding fathers whose "intent" you seem to want to honor, birthed a country where neither women or black people (for the most part, as slaves) were not allowed to vote. So unless you agree with that original state of affairs, clearly their intent can be wrong or evil, in some cases. And therefore just citing their intent is not sufficient to win an argument.

fleitz 15y ago

$1 trillion for banks, $1 billion for startups, you can really see how important this administration feels startups are. Why not just tell banks, lend half the money we're giving you to startups, instead of using it to prop up your balance sheets.

shantanubala 15y ago
The bailout was a mess, but I feel there's some truth to what Kissenger wrote a while back: basically, a leader will never be given credit for choosing between two evils (a possible crisis, or a poorly-executed bailout) because you will never be able to prove with certainty how bad the other option would have been. We have no way to truly know what things would be like without the bailout, and we really ought to think of long-lasting solutions. Like funding startups, right? Frankly, your comparison doesn't make much sense. The administration is making an obvious effort, but there's a big difference between investing in startups and attempting to patch an economy that looks like it will collapse. Investing in startups is quite literally an investment for a future economy. The bailout was a bit of the opposite -- a quick-and-dirty patch up.
- fleitz 15y ago
  Yeah, one is an accounting trick that penalizes everyone who saved money and the other has a serious chance of working. If startups were important they could have just cancelled the V-22 Osprey program which eats $2.8 billion per year, or ballistic missile defense at $9.9 billion, or DHS at $60 billion. $1 billion dollars over three years is probably less money than the gov't spends on toilet cleaning. It's equivalent to withdrawing from Iraq a week early. Sorry, if I'm unimpressed it doesn't look like effort, it looks like a PR campaign.
  - shantanubala 15y ago
    Yes, but these are all separate decisions with their own (opportunity) costs, aren't they? Think of it this way: Why would the government invest in Facebook or Twitter when there are plenty of people who already have their wallets open? That goes for many tech startups -- YCombinator alone is very beneficial for the government in an indirect way because the government no longer needs to think about funding tech startups -- someone else is already doing it really well for them. So the real necessity for government intervention is for extremely risky and potentially extremely unprofitable ventures that allow for amazing possibilities (think NASA when the US was afraid of the Soviets). Pure scientific research is often this way as well. And even NASA is a small fraction of the federal budget (I remember Neil DeGrasse Tyson repeating "half a penny to a dollar" a lot. So my point is this: startups, research, or pretty much any economy-advancing investments aren't going to exceed the cost of trying to keep people happy. The War in Iraq is an example: we wouldn't be there if we weren't scared 10 years ago. We wouldn't have been eager to go to war unless it made us feel happier or safer or more content. In contrast, how content do people feel when they hear about a space shuttle explosion? Or money "wasted" on research that could be used to feed the poor? Why did we even fund NASA again? Oh yeah, we were afraid. The United States collectively didn't give a crap about space until we imagined the Soviets creating the Death Star before us. I'm not saying any of this is rational. Actually, I really agree with you, but the fact that money is going to startups is a good sign. The quantity is low because nothing will cost more than making people feel happy, safe, and secure right now.

gojomo 15y ago

Let a thousand Solyndras bloom! But seriously, exempting smaller firms and fundraising efforts from costly regulations is a good part of this initiative. Routing public funds through private investors, not so much. While they're at it, they should completely eliminate the wealth tests for 'accredited investor' status. If some fig leaf of 'accreditation' is still needed, it should be experience-based or net-worth proportional. For example, everyone with certain business/economics/legal degrees or certifications (Series 7?) should be 'accredited' as knowledgeable enough for private investing. Or, anyone who has an equivalent amount of money in public investments or government-approved retirement accounts, should be able to invest that same amount with 'accredited' status in private investments.

kevinpet 15y ago
The problems with proportional would be twofold: 1. How can the company taking the investment verify that the investor doesn't have other Angel investments? Remember: this is most important from a startup perspective to make sure you're able to do clean funding rounds without dealing with the fallout of non-accredited investors. 2. There's nothing to stop people from repeatedly losing 10% (or whatever percent you allow) on stupid gambles. I'm not convinced that academic credentials would be that useful either. I'd trust someone who's run a plumbing business for ten years far more to evaluate a startup investment than I would your average MBA. I thought it amusing that Swenson talks about university professors as if they are automatically financially sophisticated (one of the few points not backed up by data in Unconventional Success).
- gojomo 15y ago
  There is nothing to protect someone who is reckless or gullible: they can lose all their money on currently-legal schemes, as well. If an investor provides false/incomplete documentation that their investment qualifies (as an acceptable proportion of their net worth or other 'government approved' investments), then that fraud should be the investor's problem when things go south, not the receiving company. Current 'accreditation' is not verified by the government, but rather asserted to the company/lawyers with enough credibility to convince them. Is someone who inherits a million dollars more qualified to invest $10K-$990K into a risky tech venture than someone who's actually earned $10K-$990K in the same field as that venture? Because that's the logic a dumb-money wealth test suggests.

steins 15y ago

"Specifically, the President has called for increasing limits on “miniofferings,” allowing “crowdfunding,” and phasing in some requirements for small firms as they go public." They are going to ruin a good thing.

jdavid 15y ago
you read this wrong. they were going to open up crowd sourcing of funds and make it easier to legally start a company from 'crowd sourced' funds.

wilschroter 15y ago

It's going to be interesting to see how companies themselves deal with the concept of having a slew of shareholders (fiduciary duty, reporting, etc.)

beatle 15y ago

Obama should've done this on the first year of his presidency. And I agree, $2B seems like a low number compared to the bank bailout.

9085 15y ago

If they want to help entrepreneurs then they should give contractors more tax relief. 1099 tax payers get shafted.

3pt14159 15y ago

Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé ... Détestable principe que celui de ne vouloir grandir que par l'abaissement de nos voisins! Il n'y a que la méchanceté et la malignité du coeur de satisfaites dans ce principe, et l’intérêt y est opposé. Laissez faire, morbleu! Laissez faire!! (Trans: "Leave it be, that should be the motto of all public powers, as the world is civilized ... That we cannot grow except by lowering our neighbors is a detestable notion! Only malice and malignity of heart is satisfied with such a principle and our (national) interest is opposed to it. Leave it be, for heaven's sake! Leave it be!")

rayiner 15y ago
There have been developments in our knowledge of the market since 1680 (when that quote was uttered).
- anamax 15y ago
  > There have been developments in our knowledge of the market since 1680 Yes, but the argument for regulation is that said regulation provides more benefits than the incurred costs. Considering how badly regulated markets do.... Remember, regulation is systemic risk.
  - rayiner 15y ago
    Regulation is one solution to market failures. It's not the only solution, but in many cases it works well. The Clean Air Act, for example, has been extremely successful at addressing the negative externalities created by air pollution. Beyond that--the lesson that we're learning from modern economics research is that there are no touchstones. Humans aren't rational actors, the efficient allocation theories are predicated on unrealistic assumptions about the behavior of economic actors and the lack of transaction costs, etc. "Laissez faire" isn't any more of a guiding principle than "big brother knows best." The only way to proceed is empirically--use measurements to determine when government solutions are needed and when market solutions suffice. It's a fairly uncontroversial claim that the market naturally under invents in R&D. It's something you'll see in any basic economics 101 textbook. So why shout "laissez faire" to a government initiative addressing such a market failure?

paul 15y ago

Fixing the immigration and patent systems would be infinitely more helpful (i.e. stop getting in the way).

anigbrowl 15y ago
Congress has to do that, the executive branch can't. To the extent that the executive branch is streamlining the existing immigration system, they're being derided as amnesty-offering traitors by the xenophobic know-nothings that want Berlin Wall 2.0.
- rbanffy 15y ago
  Just as a side note, you really don't want an executive branch that can do that (fixing the immigration and patent systems). edit: sorry if it didn't end up as clear as it should
  - anigbrowl 15y ago
    -
    - anigbrowl 15y ago
      The above isn't meant as a comment - it was a question that was answered by an edit in the grandparent, but I then carelessly edited this instead of deleting it. By the time I noticed the error the edit/delete window had closed.
  - thmcmahon 15y ago
    Works OK for countries with parliamentary democracies.
    - jacques_chester 15y ago
      Parliamentary democracies still have distinct executive branches.

TechNewb 15y ago

Where is the money coming from?

timjahn 15y ago

Throwing $2B at startups isn't going to create a new generation of entrepreneurs. 1. Fix the healthcare system. Right now, you're punished if you don't work for a large company in the sense that you're charged up the wazoo for health insurance. Work for a large company and it's close to free. 2. Fix student loans. One could argue don't go to college but I think we can agree there's some value to good schools. 3. Educate tomorrow's would-be entrepreneurs. A lot of America is taught to go to college and get a job at a large corporation after. Let's shift the perspective. Let kids know that starting your own business is a possibility and not something to be ashamed of.

anamax 15y ago
> 1. Fix the healthcare system. Right now, you're punished if you don't work for a large company in the sense that you're charged up the wazoo for health insurance. Work for a large company and it's close to free. No, it's not "almost free". It's paid for by the company. And yes, paying yourself is tax-deductible in many circumstances. I've actually paid for health insurance out of pocket as an "older american". Rent was more expensive. That said, healthcare could be a lot less expensive, but since much of that expense comes from govt involvement, it's unclear why anyone would think that even more govt involvement would help. For example, there are a lot of procedures for which I don't want coverage, but thanks to govt requirements, I can't opt out and pay less. > 2. Fix student loans. One could argue don't go to college but I think we can agree there's some value to good schools. Student loans are one way to pay college costs. The method of payment doesn't actually affect the costs much. Increased student aid seems to increase college cost.
- rabidsnail 15y ago
  Being cheaper than rent is a pretty low bar.
- eli 15y ago
  > I've actually paid for health insurance out of pocket as an "older american". Rent was more expensive. I think you were very lucky. As a "young & healthy american," that was not my experience.

useful 15y ago

Nice to see a website I worked on finally get on HN. http://www.startupamericapartnership.org/ http://www.startupamericapartnership.org/

brc 15y ago

Egads - having filled out the application forms for government export grants, I can only imagine all the strings attached, hoops to jump through and everything else. Use the money to pay down the debt and just relax the regulations on capital formation and hiring and let the private sector do the work. And work some type of internet freedom into the constitution alongside freedom to have guns.

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feralmoan 15y ago

$2 Billion is probably all that can be afforded until the bigger political battles can be won - ie: the 1% issue and getting corporate tax back into the public coffers. Quite a gamble to take however that the next generation of public funded Delaware startup corps will realize their longer term tax potential.

idonthack 15y ago

THAT'S SOCIALISM >:(

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omarchowdhury 15y ago

"Google Startup America Partnership participants will be able to use Google advertising platforms like AdWords and Boost and receive a $1,000 Google match for every $1,000 they spend."

mmphosis 15y ago

Meh. Who needs the new economy? http://news.ycombinator.com/item?id=3336286 http://news.ycombinator.com/item?id=3336286

droithomme 15y ago

Oh great so now rather than compete with other entrepreneurs on a level footing we have to compete with companies that are partially owned and funded by the federal government.

sentinel 15y ago

His own money, right?

andyl 15y ago

Let the startup fund be paid for by a tax on patent trolls.

goodweeds 15y ago

Here's my idea, up that to $2T by ending our current wars, forget start-ups, and instead invest it all into installing gigabit fiber to every home in the country. This would assure America's competitive infrastructure edge, and create more market opportunity than we can currently fathom.

jaysonelliot 15y ago

I'm disappointed by the amount of political commenting on this post, as opposed to what I was hoping to find—discussion of how the fund will actually work and how to take advantage of the various elements of the initiative. I'm trying to make sense of the press release, but finding it difficult. It's full of announcements, but seems to be missing any calls to action. There's more information at the SBA - http://www.sba.gov/startupamerica http://www.sba.gov/startupamerica It contains this promising paragraph: "…the gap is particularly acute in the so called “Valley of Death” for financing rounds between $1-4 million. Over the past 4 years only 6% of all venture capital has been deployed in that stage … The Innovation Fund will target this gap, providing a 1:1 match to private capital raised by early stage seed funds." Does this mean that access to money in this fund is only through existing VC firms? Or does it mean something else? If anyone can extract the actionable information from all this static, please do share. It would be great to know if new funding methods were actually opening up, or if this is just an infusion of cash to VCs.

temphn 15y ago
It's full of announcements, but seems to be missing any calls to action. Ok. Here is the call to action: hire a lobbyist or ex-Congressman who will get you in front of Startup America. Preferably a large bundler like George Kaiser. They will get you sweetheart loans and endorsements from the President and Vice President. We've seen this dozens of times before when "free money" is available. Scarcity requires an allocation mechanism. In the case of the very similar Qualifying Therapeutic Discovery Tax Credit (QTDTC) from last year, those who lobbied were those who got the bling. http://www.bizjournals.com/sanfrancisco/blog/2010/10/winners_losers_in_race_to_biotech_tax_credits.html Clearly somebody — probably a few thousand somebodies — are going to lose out. ... The takeaway for those biotech companies that miss out on the tax credit, according to Eisenberg: Tell your member of Congress to extend and expand the program. And as with the QTDTC there will be a catch. Failure is criminalized. The failure of Solyndra prompted an FBI raid. What did the executives know and when did they know it? All government "grants" are like this. For example, to get the biotech "Qualifying Therapeutic Discovery Tax Credit" from last year, you had to essentially submit to an IRS audit. http://www.irs.gov/newsroom/article/0,,id=224505,00.html Q5. What type of documentation and records related to the application should applicants maintain in order to satisfy IRS requirements in the event of a future audit of “qualified investment” claims? A. Documentation and recordation should include information sufficient to verify and explain costs treated as qualified investments, e.g., detailed work papers and invoices. Translation: embarrass us and we will retroactively find your definition of "qualified investment" to be at variance with that of the IRS. Bottom line, it is unlikely this program will be substantively different from those preceding it.

electic 15y ago

Death of SOPA > $2B Dollar Fund

Achshar 15y ago

But will they accept foreign startups? Also where can i apply? startupamericapartnership.org does not seem to accept foreign applications.

wavephorm 15y ago

$7 Trillion for the banking cartel and $2 Billion for job creators? Explain that one to entrepreneurial voters next year.

jszielenski 15y ago

So how do I apply? Where is a link to the application?

useful 15y ago
http://www.startupamericapartnership.org/get-registered http://www.startupamericapartnership.org/get-registered afaik it basically gives you access to this: http://www.startupamericapartnership.org/search/content?f[0]=bundle%3Aresource http://www.startupamericapartnership.org/search/content?f[0]...

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inaworldofideas 15y ago

Making helicopter drops is destroying the economy not helping, they think innovation comes from the printing press.

joska 15y ago

The sovjests tried this, it did not work. Why should it work now? Central planning of inovation just doesn't work. And in a free society its just not the proper role of goverments to force people to give their money money to central planning, as they them selves make much better investments descisions.

DaniFong 15y ago

I am so frustrated with these government programs that supply hyperactive, startups (Solyndra! Argh!) with too much funding, then crash and sully the reputation of entire fields with their profligate spending and successive failures. The scientific grant system is even worse! With the rate of grants being accepted at 5%, everyone becomes extremely conservative. Many professors spend most of their time fundraising, not doing science. There is a good case that science would be progressing faster with no government funding at all. There are obvious things the government could do to improve entrepreneurship. Like simply not kicking our entrepreneurs out! Stapling a green card to our graduate's diplomas -- the fact that we invest nearly a quarter million dollars in each STEM PHD and then don't let them stay has been a known absurdity for more than decade, yet they still don't fix this problem. Or how about taxing oil and gas like everything else! Even ignoring the trillions of dollars spent policing the persian gulf region, the tax policies surrounding oil amount to an enormous subsidy, making it cheaper in the US than almost anywhere in the world. Simply taxing it would save the budget and dramatically improve prospects for green energy. The list goes on. I'm stunned by the collective incompetence of the government in stimulating startup growth. Maybe there are good, structural reasons for inaction in the short term, but these issues have been around for years!