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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 h

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.

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.