Small business is and has always been the backbone of America’s economy. From first colonies to our current economic recovery, small businesses and the entrepreneurs who start them, have been fundamental to the economic, cultural, and political progress of the United States. In fact today, small businesses account for 65 percent of new jobs and 99.7 percent of over all employer firms. Interestingly enough, small businesses employ 43 percent of high-tech workers and their employers produce 13x more patents than employees of larger corporations.
Despite their key role in our recovery, entrepreneurs looking to found small businesses encounter extreme hurdles when it comes to funding their ventures. With investment headline after investment headline on Techli and other technology publications, it’s easy to forget that only one percent of the U.S. population has access to accredited venture capitalists and investors and 95 percent of business plans seen by investors are ultimately rejected. With limited access to investor capitol and bank loans becoming harder and harder to come by, entrepreneurs can have a hard time getting off their ideas off the ground.
However, the expanding crowdfunding industry is set to disrupt the way entrepreneurs and small businesses do business. As a part of the as part of the JOBS (Jumpstart Our Business Startups) Act signed months ago, a new crowdfunding bill was signed into law that could change the fabric on entrepreneurship in this country. The bill removes restrictions of who can invest, allowing any one person to invest $10,000 or 10 percent of the annual income, whichever is more, in any startup or business raising $1 million or less. However, all fundraising must go through a registered crowdfunding platform like Kickstarter.
The below infographic from RockPost shows the deep need for an infusion in small business capitol and the importance of this vital sector of our economy.
