Leading Entrepreneurship, Innovation, and Small Business Organizations Call on Congressional Leadership to Pass the New Business Preservation Act
May 6, 2020
WASHINGTON, D.C. – Today, the Center for American Entrepreneurship (CAE), along with nine other leading entrepreneurship, innovation, and small business organizations and associations, released a letter to Speaker of the House Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell, and Senate Minority Leader Charles Schumer calling for Congress to swiftly pass the New Business Preservation Act.
The legislation, which would create a new federal program to incentivize continued venture capital investment in America’s most innovative and promising young companies or “startups,” was introduced in the Senate (S. 3515) on March 18th by Senators Amy Klobuchar (D-MN), Chris Coons (D-DE), Tim Kaine (D-VA), and Angus King (I-ME), and was introduced in the House (H.R. 6403) on March 26th by Reps. Dean Phillips (D-MN), Terri Sewell (D-AL), Ro Khanna (D-CA), and Tim Ryan (D-OH).
“Repeated research has demonstrated that startups are disproportionately responsible for the innovations that drive economic growth and job creation,” the organizations wrote. “Startups, therefore, are crucial to the U.S. economy’s capacity to sustain and recover from the coronavirus emergency and the damage it has inflicted on economic growth and the labor market… Meanwhile, thousands of fragile startups have been shut out of the Paycheck Protection Program and the Federal Reserve’s Main Street Lending Program, with many forced to lay-off employees or close their doors permanently. Simply stated, the coronavirus emergency has imperiled an entire generation of the nation’s most innovative and promising young companies – and, in turn, the demise of thousands of these companies imperils the post-coronavirus economic recovery.”
The New Business Preservation Act would address this threat to the nation’s startups and economic resilience by establishing a program, administered by the Treasury Department, which would allocate $2 billion in federal dollars ($1.5 billion initially, and $500 million in follow-on investment) to the states on a straightforward population basis to attract private venture capital by offering a 1-to-1 match of federal dollars with venture capital investment in promising startups, particularly in states outside the major venture capital centers.
The legislation is modeled on Israel’s “Yozma” program of the late-1990s, which successfully incentivized U.S. venture capital firms to invest in promising Israeli startups, and builds on other successful federal-state partnerships to support small businesses, such as the State Small Business Credit Initiative (SSBCI).
The 10 signatories include the Center for American Entrepreneurship, Economic Innovation Group, Engine, InBIA, Information Technology and Innovation Foundation, Progressive Policy Institute, Small Business and Entrepreneurship Council, Small Business Majority, TechNet, and Third Way.
The letter can be found here.
About the Center for American Entrepreneurship (CAE)
The Center for American Entrepreneurship (CAE) is a nonpartisan research, policy, and advocacy organization whose mission is to engage and educate policymakers in Washington, and at state and local levels across the nation, regarding the critical importance of entrepreneurs and startups to innovation, economic growth, and job creation – and to pursue a comprehensive policy agenda intended to significantly enhance policy circumstances for new business formation, survival, and growth.
For more information, visit www.startupsUSA.org
Follow CAE on Twitter: @startupsUSAorg
