Business & Tech

Obama's "Startup America" Initiative to Support Entrepreneurship

"Startup America" initiative to celebrate, inspire, and accelerate high-growth entrepreneurship in Renton, Pacific Northwest and across the nation.

Whether your small business is in the early stages of development or already thriving and seeking growth capital, you will need to determine whether venture capital financing is right for your company – and if so, how you get it. It’s why President Barack Obama announced the “Startup America” initiative to celebrate, inspire, and accelerate high-growth entrepreneurship in Renton, the Northwest and across the nation.

Venture capital, also often referred to as equity capital, is money raised by a business in exchange for a share of ownership in the company.  Equity financing allows a business to obtain funds without incurring debt, or without having to repay a specific amount of money at a particular time.  A key source of equity capital for new and emerging businesses is venture capital firms - high net worth investors who seek high returns through private investments in start-up companies.  

Typically, venture capital investors invest funds unsecured by assets in young, private companies with the potential for rapid growth in the hope of profiting from their investment.  Such investing covers most industries and is appropriate for businesses across the spectrum of developmental stages.  Investing in new or very young companies inherently carries a high degree of risk. But venture capital is long term or “patient capital” that allows companies the time to mature into profitable organizations.

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Successful long-term growth for most businesses is dependent upon the availability of equity capital.  Lenders generally require some equity cushion or collateral before they will lend to a small business.  A lack of equity limits the debt financing available to businesses.  Small businesses often rely on venture capital to provide a fresh injection of equity, which can allow the company to seek new debt. 

With President Obama’s “Startup America” initiative, venture capital can be leveraged with a match from the U.S. Small Business Administration to strengthen capital access for entrepreneurs and firms with high-growth potential.  Through our Small Business Investment Company (SBIC) Program, SBA will target over $2 billion in new growth capital into companies located in underserved communities and emerging sectors such as clean energy, as well as in early-stage companies facing difficult challenges accessing capital. 

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Venture capitalists seek companies with high growth potentials, strong management teams, and solid business plans.  They typically invest in ventures involved in industries or technologies with which they are personally familiar.

At the Small Business Administration, we’ve always been proud to serve not just Main Street businesses, but also small, high-growth firms.  Through our SBIC Program, we’ve even helped companies like Intel, Apple Computer, Outback Steakhouse, Staples, and FedEx as they were just starting out.  These once small startup companies have added millions of jobs and transformed our economy over the decades.  “Startup America” will focus the resources of the SBA and other federal agencies to partner with the next great American success story to continue and expand our economic recovery.

Entrepreneurs interested in seeking financing can visit the venture financing page on the SBA Web site.  The web page includes several useful articles on venture capital for entrepreneurs.  The page also includes a directory of SBICs, listed by state.  

Calvin W. Goings is the SBA Regional Administrator.


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