WASHINGTON, D.C. - U.S. Senator Cory Booker (D-NJ) today introduced the Startup Opportunity Accelerator Act (SOAR), legislation that invests in startup accelerators and incubators to spur ecosystems of entrepreneurship in new and underserved areas.
Incubation and accelerator programs, which provide entrepreneurs with essential services such as experienced leadership, office space, access to financing opportunities, and structured mentorship for certain periods of time, are critical elements of innovation ecosystems where successful startups can flourish. According to research conducted at MIT, areas in which an accelerator opens see a 97 percent increase in the number of distinct venture capital investors compared to similar areas without an accelerator.
A companion measure was introduced in the House of Representatives yesterday by Reps. Lisa Blunt Rochester (D-DE) and Brian Fitzpatrick (R-PA).
“Innovation is the secret sauce that has fueled the American economy since our country’s inception,” Senator Booker said. “Unfortunately, capital and resources to support that innovation is increasingly only going to a small handful of cities. Our bill would help address this problem by identifying and cultivating startup entrepreneurs in underserved areas and providing them with the support and resources they need to grow and succeed.”
“Our economy is driven by the entrepreneurs and small businesses who are investing in innovation for the future,” Rep. Blunt Rochester said. “By investing in programs like SOAR, we can drive economic growth in underserved areas and further empower entrepreneurs, including women, minorities, veterans, and individuals with disabilities. I’m thrilled to be introducing this bill with Congressman Fitzpatrick and I’m hopeful that together, we can shepherd this bill to passage.”
“We know growth accelerators work at stimulating investment and job creation but too often those gains are concentrated and leave American workers and entrepreneurs in rural, suburban, and urban areas behind,” Rep. Fitzpatrick said. “Working with Congresswoman Blunt Rochester, we’ve come up with a measure to support growth in underserved communities – wherever they are – by empowering entrepreneurs with essential services like experienced leadership, office space, access to financing opportunities, and structured mentorship. Together we can plant the seeds of nationwide growth.”
The SOAR Act builds on a U.S. Small Business Administration (SBA) Growth Accelerator Fund competition, in which accelerators and other entrepreneurial ecosystems compete for funding to grow and expand their reach to engage more startups and new communities. The program has existed for three years at the SBA, offering prizes to accelerators across the country and in Puerto Rico.
The SBA reported that the program in 2014 and 2015 funded 138 accelerators that supported 5,000 companies that raised approximately $1.5 billion and employ nearly 20,000 people. The 2017 version of SOAR would authorize $6 million in funding each year for 5 years.
While the number of accelerators has grown by more than ten times between 2008 and 2015, according to the Brookings Institution, the vast majority of growth has taken place in high-income, well-established regions. By investing in these programs and broader tech ecosystems, the SOAR Act would unleash economic growth in low-income and rural communities and empower underserved entrepreneurs, including women, minorities, veterans, and individuals with disabilities.
Specifically, the SOAR Act funding would provide:
1) Funding offered through a competitive prize program for organizations supporting early-stage startups including new and existing accelerator programs, incubators, and universities
2) Targeted focus on encouraging growth accelerators that address key geographic and demographic gaps, including women, veterans, minority-entrepreneurs, individuals with disabilities, and rural communities
3) Increased funding which will allow the SBA to continue to expand the strength of growth accelerators across the country
4) Oversight and transparency of the program