House Democratic Leadership Snubs Small Businesses

No telling whether Sam Graves (R-OH) will emerge as Committee Chair a stronger leader for small businesses than he has proven to be as Ranking Member, but one thing is for sure, the House Democratic leadership continues to snub small businesses in not giving Nydia Velazquez (D-NY) the boot. Having proven herself completely without regard for the interests of small businesses, she yet remains the highest ranking Democrat on the House Small Business Committee, swapping places with her heretofore side-kick Sam Graves. She steps down to Ranking Member just as he steps up to Chair.

It's hard to imagine that Graves could do a worse job than Velazquez. Where in all the concern over a dismal economy, and confronted with the evidence that small businesses, especially the newest among them, are the true drivers of job growth, is there leadership enough to stand up for entrepreneurs?

It is high time that we make a shift from an economy dependent upon large corporations (and their periodic bailing out) toward an economy of self-reliant, independent, innovative, doers. It is high time that we cease embracing the ideas of an old economy, and start looking towards a new one, where college graduates consider themselves as likely to start their own firms, or join a startup, as they are to send around a dozen (or a hundred) resumes to name-brand firms with roots generations old.

There is balance to be regained: not in seeking to destroy those corporations, but simply in levelling the playing field so all companies compete on their merits, regardless of age or size. There are too many inequities in today's system, that stifle creativity, innovation, and job growth, that won't be fixed simply by bending the president's ear to the claims, and requests, and demands of corporate behemoths.

Tomorrow belongs to the entrepreneurs! Today is time enough to realize that.

Angels or Demons

Following up on my recent post regarding Angels' reduced appetite for seed and startup investing, the October 2, 2010 print edition of The Economist presents a brief article entitled "Venture Capital: Angels or demons?", which argues the opposite point, describing a category of creature it dubs super angels "who run funds that invest in deals considered too small to be of interest to traditional venture-capital firms.":

Established firms have rediscovered their appetite for seed funding: Greylock Partners, a well-known venture firm, this week said it had launched a $20m seed fund.

So, the question is, which is it? Well, obviously it can be both. One problem we face is what I term the Depth-of-Field Problem. The concept of depth of field derives the world of photography and describes the range of clarity that surrounds a point of focus. The greater our distance from a point of focus, the more things look alike. The closer we are, the greater variety we can distinguish.

This often leads us to stereotype and cluster that which we have the least experience with, as the title of the above cited article implies: angels or demons? Despite entrepreneurs' and investors' possibly differing motivations, it is possible to find common ground. From my vantage, the greatest need in our economy is for seed and startup funds, which often provide the spark to an entrepreneur's kindling. Anyone interested in providing it is an angel in my book.

***Edited to add:
Here's a link to the Greylock Discover Fund, cited above, which anticipates investments from $25k -$500k.

Angels Decreased Appetite for Seed and Startup Investing

Posted on Entrepreneurship.org: Angels Decreased Appetite for Seed and Startup.

Here's the alarming statistic:

Angels’ seed and start-up stage investing declined to its lowest level in several years...

The question remains: who will pick up the slack? Will SBIR be renewed at a moment in the economy when seed capital is most crucial?

More importantly, will the politicians elected to office in Washington (on both sides of the aisle) finally find the will and inspiration to alter the face of our economy, by shifting the focus from protecting jobs at large corporations to encouraging business creation?

We need more small businesses, that create jobs, and grow into large businesses. We need a new economy. We need innovation, and rejuvenation. Entrepreneurs do that. Let's mow down the weeds, and let entrepreneurs compete and thrive!

What's so free about the market?

In case any of you had any lingering suspicions that there actually exists anything close to a free market in the United States, that produces anything even resembling a level playing field for all participants (Giants and Lilliputians alike) think again. Here's a little excerpt from the Wall Street Journal article about General Motors that link goes to:

Now it turns out, according to documents filed with federal regulators, the revamping left the car maker with another boost as it prepares to return to the stock market. It won't have to pay $45.4 billion in taxes on future profits.

The tax benefit stems from so-called tax-loss carry-forwards and other provisions, which allow companies to use losses in prior years and costs related to pensions and other expenses to shield profits from U.S. taxes for up to 20 years. In GM's case, the losses stem from years prior to when GM entered bankruptcy.

Whether or not a "free market" could produce ideal circumstances for supply and demand to determine fair pricing on all things from wages to food (a suspect and highly debatable point even in the abstract), we may never know. Ideology, rage, and protest aside (all of which are in the ascension these days), there is no free market extant. Unless we work to mitigate the inequities in the system, meaning in clear language, remove the barriers to competition on the merits of a company's technology or services, rather than any number of pre-existing advantages, there is no high ground on either side of the debate.

I wonder if any of the changes in Washington will allow leaders to step up to the plate, swing, and crack the ball high and over the fence. Only time shall tell.