Reducing Barriers to Entrepreneurship General

Problem: Small businesses cannot defend themselves from trademark threats.

Solution: Public defenders for small companies that are attacked by big business.

Problem: The net growth cap for minority businesses is constraining.

Solution: Remove the net worth cap ($1.2 million) for minority owned businesses.

Problem: The economic situation for angel investors is getting worse.

Solution: Simple changes in the tax code can help. Treat common stock differently than preferred stock. Look at different caps and provide better incentives for angel investing.

Problem: A lot of intellectual property (IP) is being wasted due to "squatting".

Solution: Use or license IP within a few years so it can be commercialized -- "use it or lose it."

Problem: Entrepreneurship is a local issue. Entrepreneurial culture needs to be instilled at the local level in order to increase awareness of entrepreneurial skills and building the next generation of entrepreneurs.

Solution: Put business incubators in historically depressed areas that do not have access to information.

Problem: There is a penalty for taking out money from your 401k to invest in your own venture.

Solution: 401ks have exceptions for certain situations (e.g. medical). Include an exception to the 401k penalty for withdrawal to invest in one's own venture.

Problem: We defer / allow forbearance for college loans and guarantee home loans but there is no similar avenue for someone to invest in their own small business.

Solution: Allow deferrals or tax exemptions to help with access to our own capital.

Problem: In the world of pharmaceutical patents, it costs the patent originator money for R&D and patent application. After a patent is awarded, a generic manufacturer may challenge the patent using a "Paragraph 4" challenge, and doesn't have to pay any fee at all. There is, therefore, no cost for a generic manufacturer to challenge a legitimately awarded patent, and a big hidden cost to the originator (who has to plan... more »

Problem: Early-stage startups lack cash to compensate advisors or employees. These startups frequently compensate with stock in-lieu of salary. As a C Corporation, it is difficult to avoid triggering a taxable event when compensating with stock. This is particularly problematic when the stock is an illiquid asset.

Solution: Defer taxes on all stock-in-lieu-of salary transactions (whether gift or granting of options)... more »

Problem: When using a contract employee, a company never knows whether the IRS will later investigate and determine that the "contract employee" is actually a full-time employee, subjecting the company to significant tax penalties.

Solution: Provide clear guidance, from the IRS, as to what is permissible under contract employee regulations. Make this guidance carry the weight of precedent, in any investigative action.... more »

Problem: Student loan payments prevent many would-be entrepreneurs from being able to afford the attempt to be an entrepreneur.

Solution: Provide an "entrepreneurial deferment" loan program. In a deferment program, allow a recent graduate to make interest-only payments or defer all payments for some period of time, should they elect to pursue entrepreneurship. In order to continue the benefit beyond two years, the... more »

Problem: It is difficult for small businesses in LMI (Low and Moderate Income) and HubZone areas to hire recent college graduates. It is difficult for the recent graduates to afford to work for these businesses, particularly given high student loan payments.

Solution: Provide loan forgiveness for recent graduates who go to work for a small business in an LMI or HubZone area.

Benefit: Reduces loan burden for recent... more »

Problem: The DCAA (Defense Contracts Audit Agency) conducts audits of defense and security-related contractors, in order to insure that public dollars are being well spent. These audits, while necessary, create a tremendous bookkeeping burden on small businesses, as they seek to comply with all the financial data rules imposed by DCAA. However, DCAA is not allowed to suggest easier bookkeeping methods (such as available... more »

Problem: When SBIR RFPs are released they are often outdated and behind in terms of what the private sector needs.

Solution: Create a two-way communication mechanism that takes into account private sector needs before an SBIR RFP is issued.

Advertise, use community colleges and local SBA to locate small (micro) businesses that are currently in operation ( businesses must meet basic criteria i.e. environmentally sound, equal opportunity employer etc.) and ask simple pointed questions like.. what one thing will help your business get to the next level of operation? Pool that data by region and analyze looking for patterns. Invest in new ideas and start... more »