Best Practices

State of Entrepreneurship 2013

Published Feb 13, 2013 by Sarah Mote

Each year the President of the United States presents a State of the Union address. Last week the new President of the Ewing Marion Kauffman Foundation, Tom McDonnell, presented the fourth State of Entrepreneurship address, focused on financing entrepreneurial growth.

McDonnell was joined a the National Press Club in Washington by a distinguished panel of experts, including Robert Litan, director of research at Bloomberg; Chance Barnett, co-founder and CEO of; Jeff Fagnan, partner with Atlas Venture; Donnan Harris, managing director of Startup America Partnership; Ramana Nanda, associate professor in the Harvard Business School; and Alan Patricof, founder of Greycroft Partners. Also on the agenda were SBA Administrator Karen Mills and U.S. Sen. Jerry Moran.

Remarks focused on the levels of entrepreneurial activity in the United States and the hurdles facing young companies as they seek capital. Challenges in bank financing, IPOs and venture capital funding were addressed, resulting in several policy recommendations, including:

  • Extend the requirements for crowdfunding investors to Regulation D accredited investors
  • Create non-financial criteria for sophisticated investors with fewer assets
  • Balance the SEC’s concern for investor protection with a  greater focus on innovation
  • In the venture capital industry:
    • Restructure investment models
    • Improve performance measures
    • Standardize data reporting
    • Reconsider FAS 157
  • Move to an auction model for IPOs
  • Offer shareholder choice on Sarbanes-Oxley (SOX)
  • Reduce the regulatory burden on banks
  • Collect better data on small business lending
    • The Federal Reserve should reinstate—and ideally annualize—the Survey of Small Business Finances
    • The Federal Reserve and the Consumer Financial  Protection Bureau must improve data collection
    • The Federal Deposit and Insurance Corporation  should require more information on lending activities  in its Call Reports
  • Conduct further research
  • Focus SBA programs on research and evaluation
    • Collect more information and data on SBA-backed  loans
    • Conduct program evaluations

Read the complete report at 2013 State of Entrepreneurship Report