If you read technology news or watch Shark Tank, you might get the impression that the US economy is booming with start ups. But recent research by Brookings and others suggests new company formation over the last 30 years is in decline. From 1978 to 2011, the fraction of U.S. economic activity from startups declined from 15% to 8%. Though there are periods of up ticks the data is pretty stark. Entrepreneurial centers like San Jose, New York and Boston continue to grow year after year, but what about everywhere else? Is innovation really in short supply?
Older firms provide certain economic efficiency allowing them to grow, unfortunately slowly, through periods of contraction. But young firms, when they exist and thrive, add jobs. From 1980 through 2010, start-ups on average created 2.9 million jobs each year, but resulted in a net job creation of 1.4 million annually because big companies banked their productivity gains by reducing their labor force. Economists like Paul Samuelson cite challenges in capital formation and increased regulation as a burden to startups, perhaps an explanation for the numbers sited by Brookings.
The iSelectFund is designed to shift the capital formation dynamic and streamline regulations concerning venture investing. In each region iSelectFund operates, our team of successful entrepreneurs work with our portfolio companies to grow ventures that build on unique local talent (i.e. BioTech, Defense, IT, Agriculture). iSelectFund’s strict process of due diligence, designed to inform investors and meet SEC/FINRA regulations, allows Financial Advisers and their clients to invest in local ventures. iSelectFund concentrates the capital and talent required to accelerate new ventures, helping local regions leverage their unique talents and local investors to achieve growth akin to hot regions like San Jose, Boston and New York City.
The “Big Idea” and mission behind iSelectFund is to streamline capital formation in local markets, support high growth opportunities, provide exceptional return to investors, and unlock the forces of Creative Destruction/innovation on vexing challenges. The companies iSelectFund invests in today will be the economic base of the future in places like St. Louis, Kansas City, Denver, Houston, etc.
Washington Post: Samuelson Article
Brookings Research: The Other Aging of America: The Increasing Dominance of Older Firms
Journal of Economic Perspectives: The Role of Entrepreneurship in US Job Creation and Economic Dynamism