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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Mr. Feld Goes to DC To Talk About Innovation

Comments (33)

I’m in Washington DC again – this time to talk about innovation.  I’ve been here three times in the past year – the first time was to hear Bilski at the Supreme Court in November and then I was back in March to talk about and promote the Startup Visa

Yesterday, Thomas Friedman article wrote another great OpEd about the topic titled A Gift for Grads: Start-Ups.  As with many Friedman OpEd’s, rather than just railing against the situation, he suggests several specific things that can be done – in this case by the current administrationb.  His premise is that to solve the unemployment issue, especially among recent college graduates, we need three things: more start-ups, more start-ups, and more start-ups.  And to do this, Friedman talked to Robert Litan (vice president of research and policy at the Kauffman Foundation) and Curtis Carlson, (CEO of SRI International) and came up with the following.

  • Create a cabinet position (Secretary Newco) that is focused on pushing through initiatives that help startups and unleash millions of entrepreneurs
  • Staple a green card to the diploma of every foreign student who graduates from a US university
  • Create a meaningful entrepreneurs visa
  • Cut capital gains taxes to 1% for startups

I strongly agree with each of these.  My one small addition to the Secretary Newco idea is that person should be an accomplished entrepreneur rather than a career politician, policy person, academic, or lawyer.

Over the next two days I’ve got a meeting with each of my Colorado Senators (Michael Bennet and Mark Udall) as well as a summit at the White House led by Phil Weiser (Director of Technology and Innovation for the National Economic Council), Aneesh Chopra (CTO of the US), and Vivek Kundra (CIO of the US).  Our summit includes a small group of VCs from different parts of the US that I’ve helped put together and it’ll focus on the issue of early stage entrepreneurs and innovation throughout the country (specifically – more than just Silicon Valley).  I’m also participating in a roundtable titled Implementing The National Broadband Plan and Protecting Consumer Choice:  The Venture Capitalist Perspective with fellow VCs Brad Burnham from USV and Santo Politi from Spark Capital.  And, as a special bonus, I’m going over the CIA later today for a tour, although I can’t talk about it, so you didn’t just read that.

I don’t spend a lot of time in DC, in politics, or even following politics (I’ve never been a political junkie) so these short immersions are fascinating to me.  Hopefully when I look back on the time I’ve spent on this stuff I’ll feel like it’s been a productive effort for the cause of entrepreneurship and innovation in the US which is the thing I spend all my time actually working on by helping create new companies.

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  • DaveJ

    Good luck! My worry would be that it morphs into some sort of federal program to "incent" entrepreneurship, like incubators or an investment fund. That's what seems to happen at the state level. Instead of getting out of the way, government gets into the biz. So if you hear some subtle hinting in that direction, I'd say try to squash it.

  • http://twitter.com/morganwarstler @morganwarstler

    Yes to all suggestions! But NO to Net Neutrality.

    Even bigger… GOV2.0: open every government division to private inspection by start-ups, to find savings though improving Government Productivity, as in large scale headcount reductions, automation, and self-service.

    This isn't about saving start-ups, this is about fixing government.

    • http://intensedebate.com/people/steve_bergs2127 Steve Bergstein

      Why the opposition to net neutrality?

  • Fred Schechter

    Feld for Secretary of Entrepreneurship!

    • http://intensedebate.com/people/StartupTrekTV StartupTrekTV

      Second the motion, Fred!

  • Etoxiuq

    Great– so anyone with a degree in basket weaving from a community college gets a green card and unemployment benefits and healthcare.

    Going to really solve the 9.6% unemployment problem and solve our 13 trillion dollar debt to give green card to basket weavers and philosophy majors.

    • Steve Bergstein

      Friedman, according to Feld, said "anyone who graduated from a US university." A community college is not the same as a university.

      If the language were changed to say "bachelors degree" or "masters degree" from an accredited university, would you be more comfortable with the suggestion? Or, if it said modify the student visa program to allow them to stay in the country and work for some period of time, with a path to citizenship that required a good (to be defined) employment history?

      The point is that innovation (AKA entrepreneurship) creates jobs and should be encouraged.

  • dogeesh

    This is a really cool idea. I wonder if it would be more powerful if we started from the bottom up, not the top down. Get local governments, like city council reps and that level politics to create "groups" and intriduce funding options and raise the issue that way up through the political system. I see this as being important for two reasons. (1) local is where entrepreneurs will gain the most value in the short term. (2) If you come to Washington with mass adoption is will be much easier to ensure agreement.

  • http://twitter.com/IBAssociate TIBA

    As someone who has run recruiting process for two different companies, I can say that the Green Card is a great idea. I can't tell you the number of times I've been told to ignore international students because my superiors didn't want to deal with the burden (time, costs) of Green Cards and helping students receive permission to work in the U.S. BTW, the first company was an internet start-up, the second was a service provider.

    Also, are you meeting with Jared Polis? One would think he'd support entrepreneur initiatives.

    • http://intensedebate.com/people/bfeld Brad Feld

      Jared is a strong supporter of the Startup Visa – he introduced a bill into the house in the fall that was a reform of the EB-5 program that includes the Startup Visa.

  • David L

    Feld for Secretary Newco!

  • StartupTrekTV

    I hope that as part of this discourse, someone looks at the re-negotiated terms in the Financial Reform bill ("FINREG", sponsored by Sen. Chris Dodd) which contains language which will kill off, by my estimation, 50% or more of Angel investment in startup companies by changing the eligibility for "accredited investor" status.

    According to the Center for Venture Research at UNH, in 2009 5% of new jobs in the US are a direct, material result of Angel investments in startup companies.

    Over the past three years, Angel investments are roughly equal to venture capital investments, in dollar terms. But Angel investments start many more new ventures.

    Go Brad!

    • http://intensedebate.com/people/bfeld Brad Feld

      I think they’ve fixed most of the bad language in the Dodd bill at this point.  I know there is some lingering stuff (like you can’t use the value of your house in the calculation anymore) but overall it looks like the really crazy stuff is gone.

      • http://startuptrek.net Steve Bell

        Brad, that's correct they've fixed most of the bad language in the Dodd bill. The only material term lingering is that Angel investors can no longer factor in their home equity; else, they will be eligible to recover at least 200% of their investment from the entrepreneurs, should the venture fail – per existing US law.

        Removing the primary residency from the calculation of net worth eligibility does sound very innocuous. That's probably why some of those involved in re-negotiating the Dodd bill seem to be patting themselves on the back, and heaving a sigh of relief.

        The problem is, it's going to wipe out (by my calculations) at least 50% of the $26B average angel investment in the US. Those investment dollars into 57,000 new businesses create (on the average) 200,000 new jobs per year.

        The amount of investment by Angels has been tracking equal to venture capital for several years now, but goes into a lot more startup ventures.

        I have been researching the distribution of income and wealth (holdings) in the US, and have a $100 bet on with a top startup lawyer about this. I know, from my past involvement as a member of the Keiretsu Forum, that most of their members have a lot of their net worth tied up in their primary residence. Angel investment closely mirrors Venture Capital investment, as far as $ per region around the US; it is heavily concentrated in California, where 60% of the money goes to work (40% Bay Area, 20% LA). And real estate holding tie up a lot of net worth in CA; as they do in MA – the #2 VC hotbed in the US.

        Super Angels like Ron Conway, and yourselves (God bless you!) make for really compelling reading, and help a LOT of startups. But the bast majority of Angels are business people that have had some degree success, and genuinely want to help others doing similar things, but aren't "flat out wealthy". There aren't that many of them left that still make over $200k per year, or hold more than $1M hard cash. About 50%, on a good day. Actually, i think it's quite a bit less, after the financial calamity of 2008-present.

        I have been primary research on this, and stand ready to prove it in order to collect my $100 bet:) It may come down to seeing the reported numbers from the experts, like the center for venture research at the Univ of New Hampshire, after the law goes into effect next year, since it is hard to prove as a numerical fact, until "after the fact". But i have a pretty compelling set of facts and rationale pulled together.

  • Steve Jones

    Re: Create a meaningful entrepreneurs visa

    I'd certainly like to see this happen, as a UK-based entrepreneur. I would much rather launch my startup in the USA, but it is impossible for me to get a visa.

    I am independently wealthy and would create wealth and jobs in the US, rather than being a drain on resources.

    I was told about a visa scam where I could buy a corner store and as long as it created a few jobs I'd get a visa. I don't know if this is true, and I don't really care, as if I do it, I'd want it to be legitimate, not some scam.

    • http://intensedebate.com/people/bfeld Brad Feld

      If you are independently wealthy and willing to invest $1m in a company in the US, you can get a visa through the EB-5 program.  However, if you aren’t willing to invest and instead want to start a company in the US with US investment, you can’t.  That’s why we’ve created the Startup Visa movement.  http://www.startupvisa.com
      />

      • Steve Jones

        Yeah, I know. I support the Startup Visa initiative and I hope you guys are successful.

        For me, the EB-5 program seems like it would be illegitimate, as I want to start a new business, not just pay the $1m "tax" for my visa. I know people who have done it that way, and I may do it like that in the end, if the Startup visa thing doesn't work soon.

  • 1 Voice

    "Staple a green card to the diploma of every foreign student who graduates from a US university"

    Come on already…you guys are smart guys and if you can not see the back door this creates to gaining green card status for an entire immigration population then you may be out of touch with the current immigration abuses in France, Canada and in the US already.

    However everyone is entitled to an opinion so if you firmly believe in this allow me to make one recommendation. Make sure you and everyone of your venture/ angel/ investor buddies supporting this legislation makes is 100% clear that you are not an investor in an online education business or supporting business component. As online universities in the US will be explode into outstanding success as people limp on though to merely get a green card. Oh, and brick and mortar universities will need to be expanded and most likely have admission standards altered to allow for the new "college-bound" immigration path.

    Oh the path of good intentions…..

    • http://bob.com Another Voice

      Right on the money — giving a green card to anyone that limps through a four year college is not going to make the U.S a talent pool and an economic power-house. From my 25 years in the tech game

  • http://intensedebate.com/people/Marketwise Marketwise

    Note that this blog post puts two Obama supporters (Feld and Friedman) squarely in the camp of people who believe that lowering taxes is stimulative.

    But since when is attracting capital to tech a problem? Isn't it the case that the exact opposite problem (too much capital) has compressed venture returns over the past decade? So this proposal basically amounts to the VCs going "Hey, there are too many of us VCs. We're not making the money we used to and we don't want to go get another job, so it would be reeeeally great if we could pay 1% capital gains. Thanks a bunch."

    If you want to create jobs, why wouldn't you lower taxes for a company that has been around a few years and has a half ass chance of being around in a few more? Oh right, because that clashes with Tom Friedman's simplified view of the world that tech is the cure all for our problems. A world view that he clings to despite the fact that we teetered on the edge of Great Depression 2 in spite of the fact that we're 15 years past the emergence of the world wide web.

    Also, how does providing incentives for immigration help today's grads? By creating more competition for the jobs they already aren't getting?

    To be clear, I'm in favor of any tax cut anybody wants to propose. Don't look at me like that. If you're fine with Tom Friedman's 1% capital gains, don't call me a Neanderthal for saying we should help out some other industries as well. And I'm in favor of any and all immigration. This country was built on the energy of immigrants. Tom Friedman is telling you that he supports a green card for every grad because it helps today's grads somehow??? I'm telling you I would support the same thing because today's grads would rather be Facebooking than working and I think that's fine for them. There are a ton of brilliant young people in India that can come in and do the work at a higher quality level anyway.

    Tom Friedman is a dope. His column doesn't follow logically and he's almost like the Will Ferrell Blue Oyster Cult skit at this point. He's got a fever, and the only cure is more cowbell (tech). He just doesn't seem to realize that the tech explosion of the last 15 years has not created the utopia that he thinks more tech somehow will.

  • sanjev

    A guy who is proud of the fact that he can't hang a level picture on the wall is advising the US Government on high tech issues?

    Good lord, the oil spill in the Gulf of Mexico is just the beginning of the upcoming disasters for the United States.

    Ayn Rand truly did have her head up her @$$.

  • Vivek Chandrasekhar

    Gosh Gosh Gosh I can't wait to be back . Its been 3 years of waiting to get the damn Visa and I am just too hungry to get this right this time. I cannot imagine any other country where people would be so tolerant and are willing to let go of nationalist fears to unite for the collective good. Nothwithstanding all the backlash and negative media portrayal about America's decline, I am convinced that the greatest odds of success for anyone is still in the US of A.

  • http://studio3wd.net Abadeu

    Great post!

    For the first post to read on your site, it is a grand introduction to this discussion on the web. You write well, maintain a creative and real solution, and motivate action.

    I have ran a small (2 people) creative firm for a few years now, and till now, it had been difficult to reach out to the right paths to start learning about and obtaining VCs funding. All we saw $$charged$$ for the information. So even the educational process led to the blockages of current propaganda style funding option of "banks or government". So I highly appreciate you and the people who initiate this dialogue and education.

    This is my first article, I plan to learn a lot and be here often and will spread the word to my circle of innovators and doers that there is this info out. So if you got this far…… Thank You……Really….!

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