What types of policies or systems are necessary to help entrepreneurship flourish in the United States?
WG: Four big categories of policy change are in America’s New Business Plan, a policy platform we developed along with other advocates to help spur the entrepreneur economy. The first category is access to opportunity. Established companies have the resources to navigate red tape, but newer, smaller firms simply don’t. We need to make it easier for smaller companies to navigate those complex systems.
The second is access to funding. About 83% of founders don’t access bank loans or venture capital when they start their companies. The third is access to knowledge. There’s no manual when you’re starting a company. Quality education, mentorship and leadership programs can help entrepreneurs succeed. Building entrepreneurial experiences in high school can help students start to envision entrepreneurship in their future, helping get that pipeline started earlier.
The last category is access to support. An entrepreneur’s risk should be a calculated risk. It’s important to think about what kind of safety nets would be appropriate to help entrepreneurs take those risks. If you’re interested in these policy ideas, you can visit the website at startusupnow.org and learn all about America’s New Business Plan.
The Kauffman Foundation promotes inclusive prosperity through entrepreneurship. What are some of the most impactful ways you do that?
WG: Through fostering a prepared workforce and through entrepreneur-focused economic development. All people, regardless of their race, gender or geography, should have an opportunity to achieve economic stability, mobility and growth. One strategy for inclusive prosperity for entrepreneurs is access to capital. As I mentioned, 83% of entrepreneurs don’t have access debt or equity when they found their businesses, so they’re left to fend for themselves. A couple of years ago, we started a pilot project called the Capital Access Lab that has funded early-stage fund managers who are doing hybrid financing — reaching a different kind of entrepreneur, including more entrepreneurs of color or women entrepreneurs and those living in rural America. We’re also partnering with Living Cities to establish a large fund that will capitalize fund managers of color, particularly Black fund managers, to help close that capital gap that exists.
How can those who support entrepreneurship make sure that every founder — no matter their gender, race or background — has an equal opportunity to succeed?
WG: First, we have to realize and agree on the principle that to grow our economy and have more people benefit from our economy, we need to reduce inequity and fully tap the human potential in this country. Since the Great Recession, only the richest 20% of Americans gained wealth, while 80% of families fell behind. That is not a good equation for the long term in this country. The other thing we need to do is prioritize racial equity. People and organizations that are supporting entrepreneurs should take a look at their programming. Is it inclusive? Is it welcoming? Do people who don’t look like you feel like they can benefit from your programming? It’s really about being intentional — looking at equity using that lens. It’s amazing what you can discover.
What will be the role of entrepreneurs in contributing to the economy for the future?
WG: Entrepreneurs are critical for rebuilding our economy — they always have been, and they will continue to be. This past year has been no exception. The second thing I would say is that entrepreneurs are critical job creation engines in this country. Most net job creations in the United States come from firms that are less than five years old. If you take all the firms that are added in any given year from all companies and subtract the reductions in staff and consolidation, what’s left are the new jobs created by young firms. So they are critical. Also, entrepreneurs make our lives better. They create products and services and technologies that make things more convenient for us — or, in some cases, save our lives. We need entrepreneurs, and we need to do all we can to keep that pipeline healthy for the long-term prosperity of this country.