Committee Examines Startups and Their Role in Economic Growth
The Small Business Committee, led by Chairman Sam Graves (R-MO), today examined the unique challenges facing startups and the dynamic growth they bring to the economy, and facilitated a discussion on their distinct policy needs.
The hearing explored whether distinctions between startups and traditional small businesses necessitate different policies, and the need to better define startups. Though there is no comprehensive and singular definition for the term “startups,” the term broadly encompasses young firms capable of creating scalable growth. High-growth startups are part of a changing entrepreneurial landscape that, even before they are profitable, can add economic vitality by hiring skilled employees and bringing new products to market. Most of these startups, 87 percent according to a survey by the Silicon Valley Bank, plan to hire in 2013, compared to just nine percent of established small businesses planning to hire in the slow economy, according to the National Federation of Independent Business.
“Successful startups generate new jobs at a remarkably high rate, averaging 27 new jobs in a year,” said Chairman Graves. “Startups are essential to a strong economic recovery, and policies should facilitate these efforts. That begins with broadening the understanding within the federal government of who these young fast-growing businesses are, what makes them successful and the pitfalls of regulation or lack of capital. We heard some great insights today on how these companies are being built and how the government can encourage startups.”
Materials from the hearing are available on the Committee’s website HERE.
Allison Lami Sawyer, CEO and Founder, Rebellion Phononics, Houston, TX, said, “Over three years ago, Robert Kester and I founded Rebellion Photonics around the technology he and his colleagues created using a federal research grant. Within the past two years we have created 7 jobs, raised $1.1 million in venture funding, become cash flow positive, and created products that truly make the world a safer place.”
Adam Arredondo, Co-Leader, Kansas City Startup Village, Kansas City, KS, said, “No startup aspires to only become a small business. Startups want to scale rapidly. Startups want to become the next big thing. Startups want to disrupt the status quo. Startups want to innovate.”
Anton Gelman, CEO, Cont3nt, Dulles, VA, said, “The goal of a startup is to test a hypothesis that should take this idea worldwide and try and dominate a market segment previously un-or under-addressed. Their growth is never linear (if it is, they are dead); it is either exponential or out-of-business. As a consequence they tackle big problems, run on intellectual property, and build jobs faster than is possible in any other industry.”###