Article by John Backus, New Atlantic Ventures.
“This post is short and to the point. Coming before the Senate this week is a bill know as H.R. 3606, the Jumpstart Our Business Startups (JOBS) Act. The Obama Administration has called on Congress to cut the red tape that prevents many rapidly growing startup companies from raising needed capital. It is time to act.
Why should we care? The Kauffman Foundation noted in a study of job creation during the 1980-2005 period that ALL net new private sector jobs were created by young companies – those five years or younger. 40M jobs created by startups during that 25-year period. None created, on a net basis, by older companies. Wow.
The House has acted and passed the bill by an amazing bipartisan vote of 390-23. Why is the Senate stalling on this issue? We sit at an unemployment rate of 8.3% and a Labor Force Participation rate below 64% – the lowest on record in recent memory. It will be a major embarrassment to the Senate if they fail to pass this bill. It doesn’t solve all of the problems facing startup companies (like Sarbanes Oxley, H1-B visas, and others) but it is a good idea and a step in the right direction.
This act will encourage the creation and growth of these young companies by providing them with new sources of capital. Angel investors helped start 61,900 companies in 2010, by investing $20.1B according to the University of NH Center for Venture Research. The JOBS act has the potential to increase that number substantially. Why not help more people invest in American startups?”
Read more by John Backus and New Atlantic Ventures by visiting their blog here.