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Saturday, January 25, 2003
 

Startup Stimulation

No, the real answer on stimulating this economy isn't a tax cut for you and me and/or folks poorer than you and me. The real way to get this economy going again is to get rich folks to stop traveling the world and get them to invest in a new company.

Now, how do we do that? Well, make it cheaper to start a new company. Let's say we have a 18-month window where it's free to start a company. The government stops charging fees and taxes to new companies. They make it much easier to incorporate. They match investment in new companies. Imagine if Larry Ellison were to get $6 million to match the $6 million he invests in a new company.

The problem with this whole idea? It isn't politically feasible. It looks like we're giving money to the rich. No one likes doing that. But, it's the way to get the economy rocking and rolling again. [The Scobleizer Weblog]

Actually, this already exists in the form of Small Business Investment Corporations, VC funds that leverage SBA funds.  These are generally smaller funds (which allowed them to avoid the cramdowns the megafunds are experiencing),  they focus on early stage investments,  and the structure of the program provides and incentive to invest rather than sit on their money.  And these are the funds that are investing now.

Scoble is right that stimulating small business investment is a key factor for recovering an economy based on small businesses. 


12:08:05 PM    comment []


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