What would you do if you wanted to encourage, enable and support entrepreneurs? And you had a $2.5 billion fund to do it? Few would use it as wisely and as well as the Ewing Marion Kauffman Foundation of Kansas City, Mo.
On every front, the Kauffman Foundation has worked intelligently to promote and sustain entrepreneurs — in the fields of entrepreneurship education, research, policy, programs, economic development, and access to capital.
“Entrepreneurship is changing the face of the world,” said Carl Schramm, president and chief executive officer of the Kauffman Foundation and author of “The Entrepreneurial Imperative” (HarperCollins, $24.95). “Our goal is to learn how to make the environment even more friendly to entrepreneurship, how to make it easier to be an entrepreneur and to be more successful.”
Among its many activities, the Kauffman Foundation sponsored Entrepreneurship Week, from Feb. 24 to March 3. More than 700 organizations participated in thousands of events around the country, highlighted by a National Policy Summit in Washington, D.C., on Feb. 26.
To prepare for the Policy Summit, the foundation spent 18 months talking to entrepreneurs and economists, according to Schramm, and prepared a detailed report, “On the Road to an Entrepreneurial Economy.” This “roadmap” addresses four key policy areas that entrepreneurs have identified as critical for fostering innovation:
• Ensuring a skilled work force;
• Reforming health care;
• Promoting innovation;
• Limiting overly burdensome regulation and liability litigation.
I’ve personally seen the dramatic impact the Kauffman Foundation has had. Angel investors are one of the most important sources of financing for high-growth startups, but until a few years ago, I had to caution entrepreneurs on how difficult it was to find a qualified angel.
To The Rescue
The Kauffman Foundation changed that. Through their efforts, they helped angel investor groups form in virtually every community in America, and they continue to help educate angels. The foundation’s work has resulted in an explosion of angel investing, and it’s now far, far easier for an entrepreneur to connect with a potential angel, whether in Silicon Valley or Sioux Falls.
The Kauffman Foundation intelligently leveraged its funds to generate far more money for entrepreneurs and, as importantly, enhance the entire financial structure for entrepreneurs in communities throughout the country.
At the kickoff of Entrepreneurship Week, I sat down with Schramm to discuss the work of the foundation, the Policy Summit and his views on how to support and enhance entrepreneurship.
In addition to systemic changes in health insurance that would untether health insurance from employment, Schramm has an additional idea: “How about employment insurance, not just unemployment insurance? We should make it easier for someone to start a business without jeopardizing their health insurance. So if you leave a job to start a business, and that business later fails, you can still get health insurance.”
Schramm also suggested another unique approach, suggesting that when a foreigner comes to the U.S. for education and earns an advanced degree in math or engineering, they then qualify for U.S. citizenship.
Increasingly, angels do the job that venture capitalists did. One innovative approach Schramm suggested was the creation of a new kind of investment fund. “We need to find ways that average individuals can pool their money to invest in angel deals in much the way they invest in mutual funds.
“Our goal is to have more entrepreneurs,” Schramm said of the work of the foundation. “Especially more successful entrepreneurs.” n
Rhonda Abrams is the author of “Six-Week Start-Up” and “What Business Should I Start?”
