Though President-elect Joe Biden has yet to announce a full list of specific policy changes, his existing Small Business and Entrepreneurs Advisory Council and a multitude of proposals aimed at small businesses (SMBs) and startups signal a renewed interest toward early growth companies.
What a Biden presidency looks like for your small business
President-elect Biden plans to supply $50 billion in public/private venture capital by funding federal, municipal, tribal, and non-profit financing businesses in disadvantaged communities. As more entrepreneurs enter the startup space, it only makes sense that more consumers would want to participate, as well.
Earlier this November, the SEC announced significant changes to crowdfunding regulation, which democratizes capital, opening the door for a variety of investors to get involved in early-growth stage companies. In addition, startups have been able to explore alternative capital, raising routes through equity crowdfunding beyond the conventional venture capital model. For example, unlike traditional VC, Regulation A offerings allow even non-accredited investors to participate. With this shift in funding opportunities, we can foresee a new crop of entrepreneurs and investors alike to begin popping up throughout the next four years. In fact, Seismic Capital Company is taking advantage of this opportunity by presenting its own Regulation A offering itself and will use the capital raised to invest in these early growth stage companies.
The new administration will place sustainability and infrastructure on the top of its agenda where specific industries are concerned. Startups in the green space can anticipate a plethora of opportunities in terms of funding and even potential government contracts and opportunities through an early infrastructure and pandemic relief legislative proposal. This will create even opportunities for infrastructure and sustainable endeavors to overlap, as many smart cities are looking to “smart cement” to reduce carbon emissions. Mission focused startups and companies such as Seismic are in a strong position to take advantage of these regulations. A funding’s, rallying consumers around common values and encouraging these new investors to have an emotional stake in the startups they support.
How COVID-19 Revolutionized the Startup Space
As President-elect Biden has stressed since his campaign run: we need to get the coronavirus under control. One in six small businesses will not be able to survive the pandemic. Thankfully, Biden has incorporated small business recovery into his overall COVID-19 recovery plan.
Biden’s small business plan advocates for a restructuring of the Paycheck Protection Program (PPP), which will provide relief for organizations with 50 or fewer workers by offering grants. Those grants will help with employee retention during the COVID-19 pandemic. Joe Biden’s restructure of the PPP includes improving program regulation, establishing a separate investment fund, and expanding protections for minority-owned companies. This is an effort to ensure minority-owned companies are not left out of federal assistance services, which they have, up to this point, offering such services as accounting help and legal counsel.
Similarly, Biden’s ‘Build Back Better’ agenda aims to help small companies and startups come out powerful on the other side of this recession while seeking more from corporate America. Biden plans to go out to help small companies manage and rebound from the pandemic so that millions of entrepreneurs can get back on their feet and drive this economy forward.
Given the anticipated renewed focus on SMBs and startups, there is a lot to look forward to in the next four years under Joe Biden. COVID-19 has turned the world on its head, but it has also kickstarted a new innovation era for the everyday entrepreneur.
The next four years will be ripe for those looking to start a company, as investors are looking at new innovations that not only meet consumer demand in a peri- and the post-COVID-19 world but also additional pandemic-proof innovations that can withstand fluctuations in the market.
About the Authors
Steven P. Weinstein is the Chair of our Board of Directors and our Chief Executive Officer of Seismic Capital Company, an early-stage growth investor committed to identifying, guiding, and nurturing companies seeking to meaningfully disrupt the space in which they work. Steven has been involved in the capital markets, financing, private equity, venture capital, and real estate over the past 30 years. Since 2002, he has been the Managing Director of Marketmaker Capital, where he managed numerous transactions, capital structures, and projects ranging from real estate advisory, loan portfolio structures, and private equity funding.
Eric White is President of Seismic Capital Company, an early-stage growth investor committed to identifying, guiding, and nurturing companies seeking to meaningfully disrupt the space in which they work. Prior to joining Seismic, Eric was the President and Chief Executive Officer of National Public Affairs Group, a Washington, D.C. public affairs, fundraising, and policy group. He has advised the President of the United States, Senators, Congressmen, and Governors as well as some of the world’s largest companies. Eric graduated from Drew University.