What The Government Should Do With $1 Billion

Don Dodge totally nails it in his post Create 50,000 companies for $1BHe builds on Fred Wilson’s No Thanks post when discussing what the US government should do with 1/20th of auto industry bailout money. 

“Government should create incentives for investment.  It is probably best not to make the investments directly. There are already some good programs and incentives in place that have been forgotten or underfunded for too long. Pouring money into these programs is certain to stimulate investment, inspire innovation, and create jobs.”

The four existing programs that Don reminds us of are the Small Business Investment Company, Small Business Innovation Research, 20% R&D tax credit, and a Seed Capital Tax Credit.

I’m personally a huge fan of the Seed Capital Tax Credit, especially administered at the state level.

Note the key phrase “incentives for investment.”  And Don correctly makes the assertion that “it is probably best not to make the investments directly.”

Ironically, none of this is very difficult to execute on and it would have an enormous impact on innovation, investment, and entrepreneurial job creation.  If anyone in the government wants to talk about it, just email me.  I’m happy to head up a committee of three which would include me, Fred Wilson, and Don Dodge.