Center for American Entrepreneurship Applauds Introduction of the New Business Preservation Act by Senator Amy Klobuchar (D-MN)
March 18, 2020
WASHINGTON, D.C. – John R. Dearie, President of the Center for American Entrepreneurship, today issued the following statement regarding the introduction by Senator Amy Klobuchar (D-MN), with Senators Chris Coons (D-DE), Tim Kaine (D-VA), and Angus King (I-ME) as co-sponsors, of the New Business Preservation Act – legislation intended to support and protect the creation, survival, and growth of startups against the economic threat posed by the Covid-19 crisis.
“The Center for American Entrepreneurship (CAE) applauds the introduction of the New Business Preservation Act, critically important legislation that addresses one of the most urgent threats posed by the Covid-19 crisis – the impact of the virus-induced economic downturn on America’s new businesses, or startups.
Repeated research has demonstrated that startups account for an outsized share of the innovations that drive economic growth, and account for virtually all net new job creation. But as new businesses, startups are fragile and extremely vulnerable to deteriorating economic circumstances, particularly sudden downturns like the threat posed by Covid-19.
The New Business Preservation Act will address that threat by incentivizing venture capital investment in promising startups outside the three major venture capital centers of Silicon Valley, New York City, and Boston by allocating federal dollars to states on a straightforward population basis intended to attract, and to be matched 1-to-1 with, private venture capital dollars invested in new businesses in America’s heartland.
Importantly, the legislation is carefully structured so that the federal government will rely on private entities to source and manage investments in promising early-stage companies in every state. All investment decisions will be based entirely on private investor determination of the economic prospects of the new companies receiving equity capital.
CAE thanks Senators Klobuchar for her steadfast leadership on behalf of America’s entrepreneurs and startups, as well as Senators Chris Coons, Tim Kaine, and Angus King for co-sponsoring the legislation. We look forward to working with the Senators, their Congressional colleagues, and the Administration to see the New Business Preservation Act swiftly enacted into law.”