Obama-Endorsed VC Program Promises 6,000 New Startups • Hacker News Board

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#21

Post by sskates » Thu, Feb 17, 2011, 5:23 PM UTC

As much as we like to slam government backed programs, at least it looks like they're partnering with the right people. The TechStars guys certainly know what they're doing when it comes to early stage funding. I'm interested to see how this turns out.

While I'm not a fan of government dollars invested in companies, some of the other stuff in the initiative (http://www.whitehouse.gov/startup-america-fact-sheet#adminis...) certainly sounds like a win for startups: "Administration Will Propose Permanent Elimination of the Capital Gains Tax on Certain Small Business Stock"

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#22

Post by _pius » Thu, Feb 17, 2011, 5:24 PM UTC

megamark16 wrote: post #14

There's a big billboard here in KC for the Kauffman Foundation's Education Startup Funding program. I thought "heck, that would be awesome, to be backed by the Kauffman Foundation!". Then I looked into it, you pretty much have to live in the ghetto to be involved in the program. Well, my wife wasn't too keen on moving to the ghetto, so I guess I'll try somewhere else.

The nerve of them, trying to encourage entrepreneurs to come to "the ghetto." How dare they want to spur economic growth among those ... people!

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#23

Post by [deleted] » Thu, Feb 17, 2011, 5:29 PM UTC

_pius wrote: post #6

watchandwait wrote: post #5

So policymakers have wrecked traditional capital markets through regulations on raising capital, interest rate distortions, twisted tax policy, patent law abuse, and anti-hiring labor policy, and now they are going to "fix" VC markets for us. Thanks. The feds can't even protect the border or catch Osama bin Laden and now they want to run some fascist incubator to give the political class even greater control over our…

... now they want to run some fascist incubator ... Are you seriously calling this fascism?

[deleted]

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#24

Post by jbooth » Thu, Feb 17, 2011, 5:30 PM UTC

yoyar wrote: post #8

_pius wrote: post #6

Earlier quoted context omitted.

... now they want to run some fascist incubator ... Are you seriously calling this fascism?

Let's call if corporatism. It means the same thing but people will whine less about the semantics.

But it's not corporatism or fascism, or socialism, it's a frickin seed program that may be a small waste of money. The government funds basic research all the time, with a pretty good track record.

Fascism is telling Volkswagen to make tanks.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#25

Post by smokeyj » Thu, Feb 17, 2011, 5:32 PM UTC

wybo wrote: post #12

I don't think this sounds that bad, to be honest. Traditionally, and for various reasons, some to do with bargaining-power in the market, some with (good, but patronizing) care for citizens, others with bureaucracy, gave benefits to large, international corporations (tax breaks, complicated regulations that keep small competitors out, and the occasional bailout...). And now startups get some support too. I see where…

What the government is doing here is 'tinkering' with a process that doesn't involve them. When such tinkering occurs, societal and market distortions are introduced in unanticipated manners.

How could the government, sponsoring a few thousand startups, be harmful to anyone? If they start competing with existing VCs, angels and incubators, they may become the ONLY source of funding. Look at the Dodd-Frank Act, they're already squeezing accredited investors out of the game. The State has an unfair advantage, they can assume any amount of risk and stay in business as long as they want. That's some steep competition.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#26

Post by ijuyhgtfrgth » Thu, Feb 17, 2011, 5:32 PM UTC

watchandwait wrote: post #5

So policymakers have wrecked traditional capital markets through regulations on raising capital, interest rate distortions, twisted tax policy, patent law abuse, and anti-hiring labor policy, and now they are going to "fix" VC markets for us. Thanks. The feds can't even protect the border or catch Osama bin Laden and now they want to run some fascist incubator to give the political class even greater control over our…

Yes it will distort the startup market slightly - but the people creating startups are smarter than the government!

We started a company in "a special development area" = 30 years of high unemployment since the shipyards closed and a civil war didn't help. Every government department was queuing up to give money to create new entrepreneurial industries.

Department 'A' required you to have less than 5 employees - no problem you just count the founders.

Then Dept 'B' had a grant if you had created 10 jobs - no problem you just count every web designer and contractor.

Dept 'C" gave you money if you worked in a green technology - no problem you just sign up another startup doing green stuff as a customer and do some work on their website.

It actually did a fantastic job of creating an unofficial network of startups who all borrowed staff off each other and discussed the latest tricks to get the latest grant.

Still cost less than having the army on the street,

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#27

Post by EGreg » Thu, Feb 17, 2011, 5:53 PM UTC

Why are so many people angry about this? Lots of our country's wealth and jobs comes from companies started recently (e.g. Apple, Google). And we have to develop alternative energy sources to break our dependence on oil (which is coming to an end sooner than the foreign oil cartel will let on).

Not only that, but if we can end America's retarded policy of running around in the deserts of the middle east -- a policy largely fueled by oil money -- we can shave a lot of the ridiculous $800 billion/year defense budget ... which is higher than THE NEXT 15 COUNTRIES COMBINED (yes and that includes China and Russia).

I think that is worth the government investing a few billion dollars into startups to help spur innovation. If anything it's a great image booster for entrepreneurism in America.

The president has long talked about his focus on America out-innovating the rest of the world. Now he is putting $ where his mouth is.

And if I heard right, they will be cutting capital gains taxes for startups to 0. I can't imagine that those of you who are running a startup are upset about that. It's a nice move, why tax startups so much in the beginning for actually growing and making money -- taking less now will make them bigger later, create more jobs, and create more taxable income later.

As for the government picking the winners ... well, first of all they are MATCHING the VCs and working with the TechStars network, secondly you don't HAVE to take government money. They are just spurring innovation.

All in all I think this is a good approach.

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#28

Post by anamax » Thu, Feb 17, 2011, 5:55 PM UTC

credo wrote: post #17

I find it amusing that the top-ranked comment describes the program as "fascist" For decades, big corporations and venture capitalists (and their lobbyists) have used every trick in the book to get themselves special advantages. Huge loopholes mean that the effective US corporate is the fourth lowest rate in the OECD (though the official tax rate is the second highest in the OECD). This is a great example of dysfunct…

> Huge loopholes mean that the effective US corporate is the fourth lowest rate in the OECD (though the official tax rate is the second highest in the OECD).

Many corps actually do pay the official rate.

Advocates of higher taxes and higher US govt spending point to western european countries and say "look at all the great services they get from govt".

The problem with that argument is that the US govt currently collects about the same amount of money per capita as those countries. (It collects more than Canada.) In other words, the US govt already has the revenue to provide those services. Since it doesn't .....

http://www.themoneyillusion.com/?p=4626

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#29

Post by hnal943 » Thu, Feb 17, 2011, 5:57 PM UTC

mconnors wrote: post #18

I sense a little cynicism here. I currently work for a startup and most of their capitol was NIH funded. We are currently releasing 3 or 4 commercial products this year. We are hiring like crazy. I understand a certain distrust of government but I think there is a disservice to assume everything government touches is corrupt (or at least 100% corrupt) You really don't have to look further than the scientific communit…

It doesn't have to be corrupt to be a bad idea. Why should taxpayers underwrite the risk of the founders of your startup?

Re: Obama-Endorsed VC Program Promises 6,000 New Startups

#30

Post by nika » Thu, Feb 17, 2011, 5:58 PM UTC

nkassis wrote: post #13

nika wrote: post #9

Earlier quoted context omitted.

When this was first announced a couple weeks ago, I read the "fact sheet" posted. In it they talked about an emphasis on putting the money into "disadvantaged areas" and "focusing on innovative technologies like clean energy". So, your concern about investments being made more based on political pull than on merit is well founded. Over 50 years ago an environment of heavy government regulation and anti-competitive le…

"The money must come from taxes or inflation," that's not how gov economics work. You borrow that money, hence you only pay the interest (until you can't). Now this model can be sustained as long as the economy grows faster than the interest you have to pay. This is why deficits spending isn't in itself that bad, it's the size of the deficit that's the issue. (probably oversimplified the whole issue but that's what I…

When you borrow money, you create a bond, right? So you have the money you borrowed (the principle) that you spend into the economy, and yet there's also this new bond out there. That bond is an asset. That bond is an increase in the money supply.

Borrowing money is the mechanism by which the currency is inflated.