In-Depth: Rep. Adriano Espaillat (D-NY) introduced this bill to extend the Growth Accelerator Fund within the Small Business Administration (SBA) with original cosponsor Rep. Tony Balderson (R-OH), who said:
“The Growth Accelerator Fund Competition aims to spur small businesses’ innovation and raise their presence in federal research and development efforts. That’s a win–win for both the private and public sectors by creating jobs, growing companies, and providing solutions to complex problems.”
Testifying at a May 2017 House Committee on Small Business hearing, “Empowering Small Businesses: The Accelerator Model,” Carolyn Rodz, founder of Circular Board, a virtual accelerator for high-growth female founders, explained why accelerators are necessary:
“[T]he startup accelerator... is, at its core, an advocacy group for founders with the inten- tion of connecting them with the experts, investors, media, and processes surrounding the art of the startup. Think of the accelerator as a liaison between the founder, who likely knows much about how to operate their business and succeed within their industry, but often little about how to raise capital, get covered by the media, build support within their local community, and get the endorsement of the most influential minds in the startup eco- system. As policymakers, there are significant opportunities to support these accelerators, not only through government-funded programs like the SBA’s Small Business Accelerator Fund, which we are grateful to be recipients of, but also by supporting trade agreements that open new markets for businesses of all sizes, streamlining the process of registering businesses and applying for government resources, particularly when working with strategic offices, such as the Patent and Trademark Office, Department of Commerce, Small Business Administration, and FDA.”
This legislation passed the House Committee on Small Business by voice vote with the support of four bipartisan cosponsors, including three Republicans and one Democrat.
Of Note: The Growth Accelerator Fund Competition was created in 2014. It provides founders of early-stage companies with education, mentorship, financing, cohort-based training, and technical assistance. It’s currently in its fifth round of funding, which is focused on accelerators that work with high tech entrepreneurs who are potential Small Business Innovation Research (SBIR) or Small Business Tech Transfer (STTR) program applicants.
In a May 2017 House Committee on Small Business hearing, “Empowering Small Businesses: The Accelerator Model,” the committee’s chairwoman, Rep. Nydia Velazquez (D-NY), said:
“Business accelerators help high-growth startup enterprises develop their products, identify promising customer segments, and se- cure resources, including vital capital and potential employees. It is clear that they serve an important role in innovation, and I am very interested to learn more about their impact on small firms. Growth accelerators have long been a powerful tool for helping innovative entrepreneurs grow. Each year since their formation in 2005, accelerators have gained in popularity. In fact, a number of accelerators nearly doubled each year between 2008 and 2014, proving that this model has real potential to assist entrepreneurs. Accelerators are unique in that they provide the best of both worlds for both startups and investors. They serve as an all-inclu- sive, creative hub that provides technical assistance for growing businesses and a central location for investors to find vetted businesses. This arrangement reduces investor risk, while maximizing the capital network for high-growth companies.”
In 2015, 111 accelerators invested more than $90 million into nearly 3,000 startups in the U.S. and Canada. However, the capital was highly concentrated, with more than one-third of funds going to Silicon Valley firms and New York startups totaling about $9 million. With this in mind, accelerators are an important part of stabilizing innovative businesses and economic growth outside those two areas.
Summary by Lorelei Yang(Photo Credit: iStockphoto.com / ismagilov)