President Obama Encourages Entrepreneurship

Posted on March 2, 2011

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A few months ago, RML blogged about an innovative program in New York City aimed at encouraging entrepreneurship and new business growth in the city. More recently, the federal government announced Startup America, a White House-supported plan meant to foster and encourage new businesses throughout the country.

According to the program’s website, Startup America is “a campaign to celebrate, inspire, and accelerate high-growth entrepreneurship throughout the nation. The Startup America Partnership is a coordinated public/private effort that brings together an alliance of the country’s most innovative entrepreneurs, corporations, universities, foundations, and other leaders, who work in concert with a wide-range of federal agencies to dramatically increase the prevalence and success of American entrepreneurs.”

Carl Schramm of the Kauffman Foundation and Steve Case, CEO of Revolution LLC and co-founder of AOL, have already thrown their support behind the initiative.  While most of you are familiar with Steve Case and AOL, many of you may be unfamiliar with the Kauffman Foundation.  It is the world’s largest foundation dedicated to entrepreneurship and is probably most well known for its annual publishing (along with the Information Technology and Innovation Foundation) of the State New Economy Index that ranks each state’s readiness for the new economy. Historically, Alabama has not ranked well in this index, which I have discussed in a previous blog.

In addition to the $1 million contributed by the U.S. Chamber of Commerce to Startup America, over $400 million dollars has also been pledged by the private sector in support of this new effort.  IBM will invest $150 million in entrepreneurial programs in 2011.   Some companies are making in kind contributions.  For example, Facebook has offered education and mentoring skills to business pioneers.  Facebook also plans to host “Startup Days” in the coming year.

A recent article in the Birmingham Business Journal also praised the program, stating that, “the initiative aims to increase education programs, provide more mentors to entrepreneurs and make it easier for early stage companies to get the capital they need to grow.”

The BBJ also pointed to Devon Laney of Birmingham’s Innovation Depot and Glenn Kinstler of Alabama Launchpad as two leaders in promoting entrepreneurship in Alabama.  The programs made available to entrepreneurs through Startup America should somewhat ease the education and mentoring burden shouldered by these men and their respective institutions and, hopefully, increase the overall quality of entrepreneurs in Alabama.

While Startup America will not offer grants, it hopes to provide all other necessary resources to help startups get off the ground and succeed. The end goal is job creation and economic development and focusing on startups appears to be the best means to creating jobs. A recent Kauffman Foundation study entitled “The Importance of Startups in Job Creation and Job Destruction” found that both, on average and for all but seven years during the period 1977 – 2005, existing firms were job destroyers, losing 1 million jobs net per year, while firms in their first year added an average of 3 million jobs.

Red Mountain Law has always been committed to helping startup companies and new businesses,  and we will keep you posted as this program grows and develops.

Russell M. Cunningham, IV
Cunningham Firm, LLC

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