The Seed Matters

PUBLISHED ON MAR 25, 2010 — STARTUP

As I observed in my post months back on health care reform, the vast majority of new jobs created in the US are at small and new companies. The easiest way to understand why this is the case is to look at the psychology of established companies vs. startups. Established companies already have their nut, they have successful products or services and are mostly engaged in protecting what they already have. Startups take risks, they disrupt, in doing so they shift or create markets. This phenomenon is only amplified during tough economic times like we are facing today.

The best way to stimulate an economy is to create new jobs. That makes new dollars enter the system, they spend money at existing businesses, they pay new taxes which can be spent to improve infrastructure. The cycle grows upward. It is not just the best way, it is really the only way out of a downward spiral.

What can we do to stimulate new startups?

Make people aware it is possible to start. Talk about startups, show them the ropes, explain the support systems that are already in place to help them find their way. Make kids aware that being a person that takes their ideas and does something about them is a viable way to live. Even though I’m super busy getting my own company going, I’m talking to students, getting myself heard and running Ignite Cincinnati, what are you doing? You know it: If not you, who? If now now, when? You aren’t too busy, do it.

Support your local startups. Pay attention to startups in your area. Give them moral support at the least, if you are a potential client or you know people who are, get them together. And do the other things on this list:

Support your local Angel investors. These guys shoulder risk, a lot of it. They come into the startup game at the earliest and most risky point. Without them many entrepreneurs would not have the resources to get off the ground. Angel investing is currently under threat from a misguided piece of legislation crawling its way through congress right now. See why it is bad. Sign the petition against it.

Support the Startup Visa. After 9-11 we got a bit xenophobic in this country and we cut off many types of immigration. This resulted in a huge dropoff of foreign students and business founders. We used to scrape the cream off much of the world and bring it here, which was awesome for our economy. We aren’t any more. We can fix this. Read more about the Startup Visa and take action.

If you live in Ohio you need to vote on Issue #1 in the next election. You can do so right away, get yourself an absentee ballot and send it in. If you didn’t get an absentee application yesterday you’ll probably get it today or tomorrow, fill it out and send it in. Issue #1 is to re-authorize the Third Frontier funding. The last fund has been an unambiguous win for the state. Support Issue 1, tell your friends and colleagues and especially your parents. We need more support in rural areas and older populations in the state.

Thank your congress people for passing health care reform. Even if they didn’t vote for it. Even if you don’t 100% agree with it. It is a (very weak, tainted) step in the right direction for making it easier to start new companies in this country.

Be more aware of Seed Stage funding. It works.

TAGS: STARTUP