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I am interested in thinking about how US policy could be better formed in order to encourage start-up enterprises and or the expansion of existing businesses. Please suggest what policy(ies) you would suggest to encourage start-ups.

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4 Answers

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Regarding the prior post, Donna Dubinsky, founder of Palm/Handspring had an Op-Ed letter in the NY Times about this. Money Won't Buy You Health Insurance. In essence, this is a Silicon Valley legend saying "man, I can't get healthcare, and I'm successful, can pay, and I'm reasonably healthy." I don't want to turn this into a healthcare debate, but I had to move four jobs away from the United States to Europe because I get talented workers for the core of the company, and the payroll tax we pay and the VAT they pay covers their healthcare.

The insurance being tied to employer concept does have a logic, albeit somewhat fiendish - larger risk pools.

Another interesting idea is tax benefits for angel investing. At least according to a panel of experts at an Early Stage Venture conference I went to four years ago, European countries allow that investment to provide a tax benefit to the investor. Again, I'd like to see some validation of that, and I'm not sure how that could apply to the USA. For all the rhetoric around job creation, tax benefits for investing in companies who hire may not be the worst idea.

I've experienced the European system of government incubation grants with matching private backing. It has its pros and cons.

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There is NO logical reason for a "larger pool" - why isn't everyone just in one large pool - rather than dividing up the pools? The historical nature of employer-tied insurance shows that it was just an accident with no real merit or logic. – TimJ♦ Mar 23 '11 at 0:54
+1 for the health insurance. Donna Dubinsky's right on the money: it's just freaking brutal in the US. I'm consulting these days, and do a lot of work for startups, but I wouldn't be doing any of that if I didn't have COBRA from my last regular job. – Bob Murphy Jul 6 '11 at 21:44
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This is not specific to any regulation, but the status-quo for how group health insurance costs/prices are set is very anti-small business. There is no good reason why health insurance is tied to an employer.

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Support the Startup Visa Bill currently before Congress. It allows foreign high tech graduates of US universities to stay in the country if they can secure a relatively modest VC/angel investment to fund a startup company.

It also allows foreign entrepreneurs to enter the country if they can find a US VC/angel to invest.

Most of the US seed fund accelerators (e.g. TechStars, Ycombinator, DreamIT Ventures, etc.) are heavily behind the bill.

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Just because the seed accelerators are behind it does not mean it is a good thing. Their motives may not be the same as the founders or the US government. I am not saying I am against it, but just because other people are "for it" does not mean it is the right thing. – TimJ♦ Mar 23 '11 at 0:52
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I think that there are some states who do not provide unemployment benefits to people starting their own businesses. At the very least the situation raises flags in some jurisdictions. Whatever your opinion on unemployment benefits it seems reasonable to me that if one sees it as a good thing then also benefits should be allowed for those pursuing a startup.

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