At the White House yesterday, I had the pleasure of watching one of the most forward-thinking pieces of pro-business bipartisan legislation to date signed into law by President Obama: the Jumpstart Our Business Startups (JOBS) Act.
The JOBS Act reduces many of the regulatory barriers that have, up to this point, made it nearly impossible for young startups to raise much-needed capital from investors. If hundreds of Members of Congress and thousands of young American entrepreneurs, myself included, are correct — and I believe we are — this historic moment is going to redefine business as we know it.
Among other capital formation measures, including the expansion of mini-IPOs, the amended JOBS Act includes an edited version of Congressman Patrick McHenry’s “crowd funding bill,” which allows startups and small businesses to raise up to $1 million annually through a number of small-dollar donations using web-based crowdfunding platforms.
Even amid concerns about the long-term potential investor fraud (which was answered, in part, by an amendment from the Senate designed to protect non-accredited investors), the United States Congress still went forward and did the right thing: they stepped up, with majorities in both the House and the Senate, to overwhelmingly support a bill that many young entrepreneurs feel will significantly improve the U.S. startup ecosystem.
I think this show of bipartisanship sends a crystal-clear message to Americans, and to young entrepreneurs in particular: The U.S. government believes in our power to fundamentally change the economic course of this country. And our elected officials are finally allowing us the freedom to do so more easily, in part by using the crowdfunding platforms that have already made sweeping changes in the lives of many young inventors, fundraisers, artists and entrepreneurs who wish to make a difference.
That even our legislators can see through the barrage of well-intended criticism and understand that making it easier for small business owners to raise investment capital is a clear win for logic–and for long-term change. Around this same time last year, the Obama Administration hosted a conference called “Access to Capital: Fostering Growth and Innovation for Small Companies.”
The key takeaway? Capital investment fuels business growth in general, and it’s especially critical to sustain young, high-growth companies (which only make up 1% of all companies, yet generate 10% of all new jobs each year).
Probably not a surprising insight to anyone in the business world, but as most young entrepreneurs know, raising investment capital in this economic climate is no small feat. Most U.S. small business owners end up knee-deep in credit card debt and bank loans instead, or they give up so much equity up-front that they can’t fuel the growth — and therefore, the hiring — that actually drives the economic engine of this country.
In our annual Youth Entrepreneurship Survey of 1,600 Americans aged 16 to 39, the Young Entrepreneur Council (YEC) and Buzz Marketing Group found that 88% of Americans feel the government does not support them. Bipartisan legislation like the JOBS Act gives me renewed hope that our elected officials are listening, and that they’re willing to take a chance on us — the young people who will lead this country forward in the next 10, 20 and 30 years.
These are exactly the kind of proactive changes my organization (YEC) has been fighting for through its #FixYoungAmerica movement; hopefully, the JOBS Act is just the beginning, and there will be many more pro-entrepreneurship reforms to come. Meanwhile, I trust that the young entrepreneurs I work with every day will take this opportunity to prove to us all that they can and will embrace the entrepreneurial spirit that defines this country — so we can all get back to work.