Become a Champion of the North American Entrepreneur

Many Canadian SME owners that follow business and politics in the US, especially over the past year, have been exposed to the various conversations and initiatives surrounding crowdfunding. Setting personal observations aside it is a fascinating discussion, not though as one might expect relative to the obvious advantages it offers start-ups and SME businesses, but more broadly for the conversation it presents specific to the competitive advantages it can offer a country.

Given the enormous challenges facing the United States since the economic meltdown (or, as many would argue, for many years pre-meltdown) the Jumpstart Our Business Startups (JOBS) Act, recently signed into law by President Obama seems, in the immediate, an unlikely game changer that may in all likelihood be largely forgotten after the Presidential election is concluded no matter who arrives victorious on Nov 6th. However, there is a much deeper sub-text to this bill that Canada should pay particular attention to.

For those not familiar with the JOBS Act, it is a legislation that enables entrepreneurs to raise capital by issuing equity online, a newly permitted form of crowdfunding. This legislation would help startup entrepreneurs raise more capital and make it easier for foreign-born entrepreneurs to start companies in the U.S.

The Bill was advocated by Steve Case, formerly of AOL and a staunch believer in entrepreneurship. To quote Mr. Case “Policy around entrepreneurship is critical, our country is only going to be as stable as our economy, and our economy is only going to be propelled by innovation and entrepreneurship.” That statement, in my view, is the undercurrent of the JOBS Act bill and the cornerstone of what this bill can achieve if given proper attention and ongoing supportive policy.

The JOBS Act is a compendium of six pieces of legislation that are all aimed at increasing the ability of small businesses to access capital and generate jobs. The following items are five abbreviated suggestions presented in the bill:

1. It’s now easier for you to take your company public.

2. It will be easier for you to sell your stock to private investors.

3. You will have a new way of raising money by selling a piece of your company to the “crowd.”

4. You can raise a lot more money before having to deal with the SEC.

5. You can grow twice as large as before without registering with the SEC.

Some of these benefits are immediately obvious to those who advocate for this bill, however, to fully appreciate how implementation of such a bill can benefit Countries like America and Canada (should similar policies be enacted here in Canada), we need to be conscience of the follow up legislation, which expands on the original intent of the JOBS Act. The Startup Act 2.0 aspires to help American companies hire foreign-born workers with skills in science, technology, engineering and mathematics–the so-called STEM fields. The bill would create two new types of visas: one that would allow foreign students who earn graduate degrees from U.S. universities in STEM fields to remain in the country; the other to offer permanent residence to immigrants who start successful companies.

Some of these initiatives are already in play here in Canada or, are currently being considered, which is why this bill and others like it are important to Canada should we wish to remain competitive on the world stage. Like America, Canada needs to compete globally for high-skilled talent. Case, who makes a compelling though obvious argument (obvious to those who hire talent so their businesses can stay competitive) says… “Over half the people who come to our universities to get Ph.D.s and master’s degrees [in STEM fields] are from other nations. We give them this education, and then we kick them out and essentially force them to create companies that compete against us. It’s completely insane.”

Canada, as you well know, is not sheltered from this insanity either, so… to quote Case once again (with insertion of Canada as the country), “we need to out-innovate other nations, and the only way to out-innovate other nations is to have an entrepreneurial culture and the support structure around capital and talent and regulation that enables Canada to be in the lead. Other countries are stepping up their game. They’ve recognized that the secret sauce that’s driven the American economy for the past century is entrepreneurship.”… more

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