Columbus Small Business Growth Initiative

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Problem

Many economically disadvantaged neighborhoods are home to entrepreneurs who have the time and energy to help turn their neighborhoods around, but who don’t have access to funding.

Solution

Councilmember Klein convened a group of small business owners, the local Chamber of Commerce, and local non-profits to determine which investments would make the most impact to revitalize disadvantaged neighborhoods and then designed a set of grants and loans to fund streetscape and building improvements, as well as start-up loans to create new jobs.

Bringing TOD and Innovation Business Districts Together

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Problem

In order to make Denver a world-class city, Mayor Michael Hancock is striving to evolve the definition of Transit Oriented Development to an idea of developing transit communities that are walkable, livable places that provide citizens with access to most of their daily needs.

Solution

As Denver continues to develop its mass transit system, Mayor Hancock is also looking to leverage the great redevelopment opportunities around station areas, increasing job and business and changing the mix of traditional uses in these development, thus transforming formerly disinvested neighborhoods. By bringing together the ideas of transit oriented development and innovation business districts, Mayor Hancock is working to create an exceptional transit system with great stations that connect to walkable communities.

Innovation Vouchers

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Problem

Small businesses often do not have the resources to harness expertise in research and development. Meanwhile, scientific, technological and other research facilities are often looking for new projects. Funding the linkage between these two groups would lead to new opportunities for economic growth.

Solution

Assemblymember Buchwald is proposing to issue “Innovation Vouchers” to small businesses to acquire expertise from universities, national laboratories, or public research institutes. The goal of the program would be to connect research facilities to small businesses, helping create jobs and spur innovation.

Digital Operating Agreement (OA)

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Problem

Entrepreneurs often face several challenges in getting their businesses off the ground because of high legal fees associated with making sure they meet legal formation requirements. Because of this financial burden, they may go without the legal and governance structure required to ensure the long-term success of their businesses.

Solution

Secretary Miller created the Digital OA, free software that allows limited-liability companies to exist entirely in digital form with basic legal protections and governance. Entrepreneurs who have never met but want to collaborate on something as simple as an iPhone app can meet via chat room, agree to terms on how to set up their business, form that entity online, and run the company without having met – all through the Digital OA. The program was designed to promote entrepreneurial growth, and allow entrepreneurs to focus their time and other resources on their core business. Digital OA is not simply a start-up resource providing formation structure, as it also serves as a common operational hub through which the company’s ongoing legally mandated meetings, decision making, and recording of events can be conducted.

The Tallahassee Innovation Partnership (TIP)

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Problem

New entrepreneurs and start-ups are an important component to growing new sectors of the economy, especially in a City like Tallahassee, where the largest employers and purchasing powers are government related (state, local, universities, etc.). Due to a lack of industry and economic dynamism, the barriers to financial capital that face any new business are more pronounced, causing an even more challenging environment for these firms to be successful. Additionally, due to certain state and local procurement policies, new businesses who often operate with lean staff capacity and knowledge find it very challenging to compete and win contracts from large public institutions.

Solution

Mayor Andrew Gillum launched the Tallahassee Innovation Partnership (TIP), providing a front-door to City Hall and other local community institutions for start-ups to beta-test and sell their products and services. The TIP also encourages the use of open public data to commercialize new technologies and improve public services. By connecting new entrepreneurs to these resources as they begin to launch their companies, Mayor Gillum is helping expand economic opportunity in his city.

 

Public Venture Capital

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Problem

In order to drive economic growth and create jobs in the changing economy, states like North Carolina must find ways to promote innovation and entrepreneurship. North Carolina currently has a great talent pool for entrepreneurs but lacks sufficient access to venture capital to fund new businesses. Many talented entrepreneurs are therefore moving elsewhere to seek funds to drive their new business ideas. 

Solution

Treasurer Janet Cowell is supporting legislation to create a Venture Multiplier Fund that will help grow the local economy by prioritizing investments in new businesses and local university innovation. This proposal would allow the Department of State Treasurer to invest a small portion of the state’s unclaimed property fund with the new Venture Multiplier fund. The fund would prioritize early-stage and smaller private-sector businesses while also creating seed capital for North Carolina’s universities to stimulate commercialization of university technology innovations across the state.

Making Taxis a Platform for Innovation

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Problem

Transportation Network Companies (TNCs) like Uber and Lyft have changed for-hire transportation forever. Taxis are still required to serve vulnerable populations that TNCs may not, but Uber and Lyft are attracting the most profitable rides. Taxi companies, drivers, and regulators across the world are seeking to improve taxi service by importing some or all of the features of TNCs – smartphone apps, gps tracking, seamless payment, robust rating systems, and dynamic pricing. Some taxi fleets are already developing or buying branded apps to upgrade their dispatch services, but the success of any transportation service is ultimately dependent on how quickly, cheaply, and reliably a customer can get to their destination in relation to other services. 

Solution

Last year, Councilmember Hans Riemer introduced a bill to develop a universal taxi app for the County. The bill gives the County Department of Transportation the authority to approve multiple universal taxi apps as long as they make their data openly available so that any app can dispatch all drivers. Riders get faster service, drivers make more money, and vulnerable populations are still served. Many cab companies already have apps but none have the universal experience or fast response time of ride-sharing technology like Uber and Lyft. If other jurisdictions adopt similar rules, it will create an incentive for private companies to agree on a universal specification and create an ecosystem of taxi-based apps and services. By granting tech companies access to all taxis, the universal protocol could become a platform for further innovation, without jeopardizing the public safety or universal service goals of taxi regulation.

High-Tech Business Investor Tax Credit

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Problem

Smaller cities throughout Massachusetts have experienced much slower economic recoveries from the recession, making it harder for entrepreneurs in these areas to successfully launch and grow their businesses. 

Solution

Senator Eric Lesser proposed legislation this year to offer a tax credit for investors looking to fund high-tech small businesses in small and medium-sized cities across Massachusetts. The tax credit would equal 10% of an investor’s investment in a business, if the business is a small one located in a Gateway City with 75% of its employees working in Massachusetts. This will encourage venture capitalists and other investors to look outside traditional tech centers like Cambridge and help entrepreneurs in other parts of the state get the resources they need to be successful.

Crowdfunding for Communities

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Problem

Currently, many small businesses and historically underutilized businesses struggle to gain access to capital and small business loans. While Texas, like many other states, has recently legalized intrastate online crowdfunding to let businesses raise capital in exchange for equity or debt, experience in other states indicates that established small businesses—especially those in underdeveloped areas—struggle to attract investors and gain the financial and technical expertise necessary to fully utilize crowdfunding to raise capital.

Solution

Representative Eric Johnson has authored legislation to establish more flexible crowdfunding regulation requirements for a specific class of small business development entities that serve historically underfunded businesses. By allowing these businesses to leverage crowdfunding through less intrusive requirements, they can maximize their impact on small businesses and boost the economic impact around Texas.

How to steal this idea:

Learn more about Representative Johnson’s efforts in this article on his crowdfunding bill: https://www.bizjournals.com/dallas/print-edition/2015/02/27/bill-would-tweak-crowdfunding-rules-for-nonprofits.html

Read the legislation he sponsored in Texas: House Bill 1629

In the face of federal inaction, many states are already taking steps to facilitate equity crowdfunding within state lines by exempting from securities laws corporations that use crowdfunding to raise capital. To date, twenty-two states and the District of Columbia have enacted rules to allow intrastate crowdfunding.

In Wisconsin, these intrastate crowdfunding rules made it possible for a small business to establish a crowdfunding portal to raise $67,000 in growth capital from just over 50 individuals.

Texas can expect to see similar opportunities because we have similar regulations already in place. However, our solution is to go one step further to increase access to capital from crowdfunding by removing barriers to this tool for the small businesses that would otherwise not be able to take advantage of it, especially those in under-developed areas.

For more information on how other states are starting crowdfunding legislation, visit https://www.nasaa.org/industry-resources/corporation-finance/instrastate-crowdfunding-resource-center/

Visit and share the gallery of NewDEAL Challenge winners at governing.com/newdeal. 

Colorado Crowdfunding Act

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Problem

Entrepreneurs today are developing ideas at a pace and in a way that traditional funding sources can’t or don’t want to fund. Many times, these companies are simply restaurant ideas, or local food markets, or even technology companies that need less than a million dollars to make their idea commercial and successful. These new business ventures require a different form of funding. 

Solution

This year, Representative Dan Pabon passed legislation, “The Colorado Crowdfunding Act,” to open up the potential pool of investors that startups can approach for funding. The bill allows any Colorado resident to invest up to $5,000 in a company without the need for accreditation. While companies must inform investors of the risk and provide quarterly reports, they can skip the audit and other expenses typically needed to attract investors. The bill will help new entrepreneurs raise the initial funding they need to launch and develop their businesses and help grow the local economy.

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