A note from our editor, Elizabeth MacBride:
Entrepreneurs create the economic future. So which kinds of entrepreneurs, working on what kinds of companies, do we want to finance? Do we seek to create the next Google, or do we want a thousand restaurants to reopen on our street corners? Venture capital is apt to finance the former. Community banks are apt to finance the latter.
These questions are top of mind as debate starts in earnest this week around the $1.9 trillion federal stimulus package. For the long-term economic health of the country, few questions are more important than how we rebuild our infrastructure for funding small businesses.
How do we get capital into rural communities, second-tier cities, communities of color – and into the hands of women entrepreneurs – who are today creating most of the new companies? (As an aside, the simple idea of setting aside time, starting today, for the smallest entrepreneurs to move to the front of the PPP application line was brilliant).
The question of broad reforms is obviously on the minds of smart people in the administration, including Don Graves, nominee for Deputy Secretary of Commerce, reportedly one of the prime movers behind a re-authorization of an Obama-era program called the State Small Business Credit Initiative. That program sent $1.5 billion to the states to increase capital to small businesses. The Biden Administration would increase that to $10 billion. Should we be doing this on autopilot? That’s a big question.
Under the Obama Administration, states decided to use about two-thirds of the money for lending programs mostly through community banking and finance institutions, and a third of the money for venture capital programs. The original SSBC program was never evaluated for its effect on jobs or company creation, only on whether it leveraged capital (it did), according to Eric Cromwell, whose firm, Cromwell Schmisseur, worked with others to do the evaluation. The change to the Trump Administration may have been one reason for the lack of follow-up.
I’ve seen a lot of economic development people get laser-focused when it comes to what they call a tech economy (what they really mean is software). Silicon Alley … Silicon Slopes … Silicon Salt Mines … Googles and Amazons are our inevitable future, so the only chance is to make sure the next one is yours, and not the next state’s.
But the future of our business and our economy is not inevitable, and the firehose of government finance and regulation is one way we shape it.
Do we want software innovation, which adds convenience to our lives but likely destroys more jobs than it creates? Venture capital was designed to produce those companies. Do we want DeepTech innovation in, say, biotech or energy, which will require more grants up front and a longer-term time frame? Maybe jobs aren’t the central concern at all. Do we want innovation of another kind, the kind that grows on street corners in a thousand small restaurants and shops and employs a lot of people? Community finance needs to be restored, in that case, and directed toward New Builders.
When it comes to finance, it’s all about who builds wealth at the end of the day. Is it those who already have it, or those who don’t, or both? That, in turn, determines what kind of society we live in.
Times of Entrepreneurship Stories of the Week
How An 11-Person Lifestyle Brand Made The Inc. 5000
Interior design firm Abigail-Elise brands, based in Colorado, specializes in creating sustainable and harmonious homes. Here’s how the company pivoted in the pandemic, and why clients as far away as the Dominican Republic are flocking.
2020 Success Story: Berkshire Camino Brought A Famous Walking Route To The U.S.
Leaving behind workplace hostility, Mindy Miraglia founded a solo business through an EforAll Program. Now she’s helping to empower others through hiking journeys across the Berkshires.
2020 Success Story: Virtual Education Poured Rocket Fuel On Fiveable’s Growth
When past students turned to her for help with their AP tests, former high school history teacher Amanda DoAmaral turned around and started the fast-growing study site.
2020 Success Story: Virtual Education Poured Rocket Fuel On Fiveable’s Growth
When past students turned to her for help with their AP tests, former high school history teacher Amanda DoAmaral turned around and started the fast-growing study site.
Best practice
Ditching the “Pipeline” Myth
An AI Now researcher finds that tech’s bro culture isn’t the result of an oft-cited “pipeline problem”—it’s the rigid recruiting practices that plague the industry—and a lack of transparency around them. Tech Crunch does a deep dive, and it’s worth reading.
Buzzworthy
Invent & Wander: The Collected Writings of Jeff Bezos, With An Introduction By Walter Isaacson
Whether you’re a fan of Bezos or an Amazon-avoider, there’s no denying his impact. This is a book for those hanging out in Clubhouse, who want to riff on his shareholder letters or the “Day 1” mindset.
Higher Quality
Many men are tired of stuffing their phone, keys, wallet and everything else they need into their pockets, and women are bored with their purses. A leather field bag made by Montanans offers an alternative. And if you’re planting now for the dry summer season, here are carefully bred xeric flower seeds from the same outlet.
Stories from Our Arkansas Reporting Project
Last spring, sponsored by the Walton Family Foundation, Times of E journalists launched a project to look at entrepreneurship in Northwest Arkansas and the Arkansas Delta. Here are a few of the standout stories we produced, thanks to reporters Nina Roberts, Eric Adams and Joel Berg and the Times of E team.
In Elaine, The Struggle To Remember One Of The Worst Instances Of Racial Violence
A group of nonprofit entrepreneurs aims to launch a museum against quiet but forceful opposition. Some of the facts of this history that still shapes Elaine are deeply disturbing.
A Mask-Making Business Born Of Friendship Offers A Ray Of Pandemic Light
The story of two immigrant entrepreneurs boosting each other.
Taking The Fight Outside
When outdoor entrepreneurs crowed Bentonville the mountain biking capital of the world, the move raised eyebrows. But it turned out to be a lucky bet.
A Cook From NYC Turned His Arkansas Restaurant Into A Pandemic Haven
Robert Lacey is a New Builder, a Black entrepreneur with a passion for reviving his family’s hometown. But he had to learn plenty and adapt fast to turn his restaurant into a success.
From NW Arkansas To Ann Arbor, How Smaller Ecosystems Are Faring
We captured the leading edge of an important trend in this story — which also highlighted Miami as one place that could benefit. Around the same time, we highlighted CDFIs through the lens of one operating in Arkansas — an increasingly important part of the small business finance conversation this year.
King Biscuit Blues Plans A Return in 2021, Not A Moment Too Soon
Two octogenarian entrepreneurs keep this storied festival alive. Mavis Staples headlines this year.
