WASHINGTON, D.C. — U.S. Senator Cory Booker (D-NJ), a member of the Senate Committee on Small Business and Entrepreneurship, today introduced legislation that invests in startup accelerators and incubators in new and underserved areas. Research indicates that just three geographic clusters—San Francisco Bay Area, Boston-Washington Corridor, and Southern California—account for 77 percent of venture capital funding in the United States, driving small business job growth to thrive in these areas and leaving rural, low-income, and other underserved areas behind.
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.
“Our country’s economy thrives when opportunities are spread across the masses, rather than concentrated to the few,” Booker said. “Right now, the capital and resources behind our startups are concentrated to only a few cities, leaving behind entrepreneurial Americans from low-income or rural communities. Our bill would help address this problem by opening up access to essential funding and mentorship opportunities for underserved entrepreneurs while strengthening new and emerging tech ecosystems.”
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 expand their reach to engage more startups and new communities. According to the SBA, in 2014 and 2015 the program funded accelerators that supported 5,000 companies that raised approximately $1.5 billion and employed nearly 20,000 people.
“TechLaunch is pleased to support this important piece of legislation. Startups are very risky and there is an urgent need for early stage funding to help them discover their path to market. This legislation provides key funding to help startups in underserved areas access much-needed early capital.” - Mario Casabona, Founder and CEO, TechLaunch, TechLaunch has launched 29 tech startups, mentored more than 60 tech startups, and coached over 150 entrepreneurs in New Jersey.
By broadening the tech ecosystems, the SOAR Act would unleash economic opportunities in low-income and rural communities and empower underserved entrepreneurs, including women, minorities, veterans, and individuals with disabilities.
Specifically the 2019 SOAR ACT would build on the SBA’s work with the Growth Accelerator Fund and authorize $6 million in funding each year for 5 years, providing: