Kauffman Moonshot Challenge
As AOL co-founder Steve Case likes to say, “two hundred and fifty years ago, America itself was a startup.” Throughout our nation’s history, entrepreneurs from Ben Franklin to Oprah Winfrey to Mark Zuckerberg have made the United States a world leader through hard work and vision. Entrepreneurs are also the engine that creates our future economy, and as a 2015 report by the Ewing Marion Kauffman Foundation showed, they also create the vast majority of new jobs in the U.S. Entrepreneurs are the ones who will restore the American Dream.
In 2017, it seems like the U.S. economy is going full speed ahead. But economic success is highly concentrated among large companies and a big company in America. This might come as a surprise because, in the media and new celebrity status of entrepreneurs, it might appear that more entrepreneurs are realizing the American Dream than ever before. Yet, according to the nonpartisan Economic Innovation Group, fewer Americans today are starting firms than at any point in the last century. Even though a new business starts every two minutes, another firm closes its doors every eighty seconds.
Most Entrepreneurs Are Overlooked
In the past, our nation’s innovation economy was remarkably dynamic, according to the Economic Innovation Group. But today, the dynamism of the US economy is much more highly concentrated: in 2016, 77 percent of startup investment in the United States—and half of all start-up investment in the world—went to three states: Massachusetts, New York, and California. While this has produced impressive financial gains among a small portion of the population in these ‘hot spots’, prosperity has not been equally accessible for hardworking entrepreneurs within the majority of the country.
On top of geographic disparities, there are also considerable barriers in place based on the identity of individual entrepreneurs. Across the board, women and minorities are particularly underinvested: in 2016, less than 5 percent of investments in the United States went to female founders, and less than 1 percent went to companies started by African-Americans and Latinos. These disparities are reinforced as investments has increasingly tended to concentrate within specific networks and influential institutions. For example, from 2007 to 2012, 10 percent of all startup financing in the world went to graduates of just six universities: Stanford, Harvard, Berkeley, MIT, NYU, and UPenn.
The Kauffman Foundation Moonshot: $1 Trillion In New Investment For Entrepreneurs
Entrepreneurship is not just a ‘nice to have’ – it’s critical to the success of the American Dream. We believe that undercapitalized entrepreneurs across America have the potential to build great businesses.
We cannot solve this problem for entrepreneurs without looking at the entire way the economic system functions, and trying to rethink how we design an economy that tries to empower the people actually trying to build something.
-Victor Hwang
VP for Entrepreneurship at the Kauffman Foundation
What started in April with the Kauffman Foundation convening a design-workshop, has now developed into a broader national conversation. The goal of the moonshot workshop, facilitated by Access Venturesand Village Capital, was to outline some actionable plans. You can read the full report here.
NOW IT’S YOUR TURN
- Watch the video recap of the workshop
- Follow the conversation coming out of the latest iteration led by Accion in Denver with the Kansas City Federal Reserve Bank
- Read the full report of the findings from the workshop
In the words of Franz Paasche, SVP Corporate Affairs at Paypal, “While we understand that we have a part to play, we also are humble in knowing there are many good ideas.” Therefore, in the meantime, we want to hear from you…
If you have an innovative solution to propose, we ask that you take some time to submit your idea and join us in this effort to help open up access for all to live the American dream.
