"Create a National Network of Public-Private Business Incubators: Barack Obama and Joe Biden will support entrepreneurship and spur job growth by creating a national network of public-private business incubators. Business incubators facilitate the critical work of entrepreneurs in creating start-up companies. Obama and Biden will invest $250 million per year to increase the number and size of incubators in disadvantaged communities throughout the country."
Does this mean incubators like yc? Obviously it isn't limited to hightech, but is that the sort of thing they speak of?
It means incubators more in the style of Pittsburgh. In Pittsburgh, most of the seed money is supplied by the state of Pennsylvania and invested via organizations like http://www.pittsburghlifesciences.com/ and http://www.innovationworks.org/. These organizations effectively provide due diligence for the entire (small) VC community.
What we will get is more available investment money in cities that need it. It is certainly arguable whether this is good for the overall entrepreneurship environment. I take the position that it is good.
YC is not an incubator, or at least not a traditional one.
On a tangent... "Obama and Biden will invest $250 million per year". That's $250 million of our dollars, not theirs. Maybe it's just me, but that type of behavior makes me extremely nervous. I did vote for him, but we should all be wary of him going forward.
I'd pesonally like to see the whitehouse take a hands-off approach to governing. At least one time.
That's like 1/12000th the current federal budget and something a lot of state and local governments are already doing through the SBA. If you don't want government investments what level of spending are you comfortable with?
Edit: I think we could cut 80% of the federal budget (over time) and keep 95% of I what I want but I don't see that happening. Let's cut the DoD to 100 billion a year and see if anything bad happens. (That should pay for around 500,000 people and a lot of tech.)
Can someone here who happens to be enthusiastic about this idea enlighten us and explain why the federal government would be a better investor than private entities?
Well for one the government can take a longer term view than a typical VC. As an example, imagine if the government focused on alternate energy years ago. Then when oil increased in price we'd be in better shape to make a transition.
Also, a lot of technology comes as a by product of working on something for the long term.
Indeed, imagine if Nixon launched Project Independence, a "Manhattan Project" for clean energy, with the goal of achieving energy self-sufficiency by 1980. Imagine he launched this sometime around, I dunno, November 7, 1973. Just think where we might be today!
People seem to have forgotten that the Federal Government has pumped $billions into green energy research over the past decades, with little to show. I haven't heard ahy good arguments for why Obama will have more success.
That's true but I think the pharmaceutical industry is an exception due to all the regulation. If it were possible to market drugs in 5 years instead of 10 most companies would focus on the 5 year drugs. With a 10 year drug there is a lot of uncertainty and is a reason there has been a lot of mergers in the pharmaceutical industry over the past few decades. A big company will contribute a sales force to sell the smaller company's products and then will just acquire them if things are going well.
I was down modded for saying 10 years is not long term but at 25 most people need to think in terms of a 40 year retirement horizon. I am 28 and I am thinking about the cost of heath care in my 80's which is 50+ years from now. So excuse me for saying this but most people under thirty need to be looking 50+ years ahead because there is a good chance we are going to be alive then.
Now most people in power tend to be older which may shorten their views but 100 years is not all that long when you start thinking the people that come after you.
Well that's just an extreme case. I don't mean subsidies but actual investment in R&D.
But most VC companies won't invest in something for the long term. Do you think any VC company would have invested in a company trying to get into space in the 1960s?
You should probably have known what you were talking about before you said that. Space-related stocks did incredibly well during the 1960's. Some of them -- satellite companies -- did, in fact, get into space.
Hmm I did not know that but thanks for letting me know. Well let me rephrase my question. Would those private companies have been so successful if the government did not allocated funding for space research or focus on it's own space program?
I don't know the answer but I think they'd be related.
Maybe I can modify my initial point to state that once the government shows a long term interest in an industry companies will be more prone to enter it.
The space program isn't really a great example of long-term thinking though. Its crowning achievement was the Apollo Project, which only took about eight years -- less than the time it takes Boeing to design a new airliner, for instance. Once we'd got to the moon we figured out we didn't have a long-term plan for what to do when we got there, so the money dried up and wound up getting spent on one short-term boondoggle after another: Skylab, the Shuttle, the International Space Station et cetera. NASA's budget and primary focus change frequently, and every time there's a grand new plan to do something new (a new launch vehicle or a trip to Mars) the money will evaporate soon afterwards leaving behind either nothing (e.g. the last few Mars plans) or a crippled project which never really does what it was originally supposed to do (e.g. the shuttle or the ISS). Meanwhile, huge slices of the NASA budget are spent idiotically thanks to Congress (e.g. the spreading of NASA facilities over various states with powerful senators).
NASA has had some great successes (the occasional huge success is pretty much unavoidable if you gather thousands of very smart people and billions of dollars) but as a poster child for government's ability to take a long-term view it's pretty dim.
Do you really think the government created and funded the NASA, the DARPA, the Manhattan Project and the NSA for the love of science? (I certainly won't deny all the really cool side effects they created, though.)
I'm sure scientists and engineers would have discovered and created as many cool things if the money was spent on peaceful research projets instead of being confiscated by the government.
Doesn't have to be better; just more and different.
Besides if its government run, it might have a strict form associated with getting funding. There will probably be a part of the application where you need to specify your revenue model. If you leave it blank, no funding. That might qualify as "better".
No. National angel fund can be found in Russia and China. They are not work very well. Basically because the managers are more care about the safety of the money, they are not tend to invest business that will spend and revenue tens of millions in future. They invest 50~100k$ roughly and expected to get back in 3~5 years with ~10% revenue.
Does this mean incubators like yc? Obviously it isn't limited to hightech, but is that the sort of thing they speak of?