Building a brighter policy future for American entrepreneurs

The best way for local governments to foster economic development is to support entrepreneurship. Policymakers should focus on the small group of growth-oriented companies—often, but not always, in the technology sector—that can successfully expand. This report outlines a comprehensive approach, which we call “entrepreneur-led economic development,” for working with these important companies. The goal is to create feedback loops between entrepreneurial leaders and other local decision makers and to cultivate networks that connect successful entrepreneurial leaders with future growth-oriented founders who can use their guidance to grow.

The U.S. venture capital industry, and the high-tech startups supported by it, have a well-known gender gap. In 2017, 16 percent of the nearly $83 billion invested in U.S. venture-backed startups went to companies with at least one female founder, and just 2.5 percent went to startups with all-female founders. Meanwhile, an estimated 9 percent of general partners (the people making investment decisions) at leading U.S. venture capital firms are women.

The United States is the birthplace of modern, high-tech startups, and the funding model that helps support them. What we think of today as venture capital originated in Boston in the mid-1940s, and later came of age alongside Silicon Valley’s young high-tech companies in the 1950s, 1960s, and 1970s.

The “Rise of the Rest” has become a common phrase used to describe the emergence of high-value entrepreneurship clusters in areas outside of the well-known coastal startup hubs such as San Francisco, Silicon Valley, Boston, and New York. The concept has been championed by famed entrepreneur and investor Steve Case, who has been instrumental in elevating entrepreneurship in communities throughout the United States.