A good friend of mine is getting into politics at the state level. We met recently to discuss some of the issues that entrepreneurs currently face, as well as some potential solutions. After reflecting on our conversation, here are a few ways the government could promote rapid growth and positive change:
1) Entrepreneurs are a unique combination of confident, driven, and a little bit nuts (myself included). They are a little nuts when it comes to creating opportunity and they don't let things like risk or a chance of failure stop them. This is the exact group that you want to empower if you want positive change.
2) Give entrepreneurs an incentive to drive growth. For example, if you give them a 6 to 12 month dollar-for-dollar tax credit for each new hire, our states unemployment rate would plummet. Give them a 6 to 12 month tax credit for every dollar invested in new technology, new equipment or new facilities. This would pump a huge amount of capital back into the economy and the positive ripple effects would be massive. Yes, there would be a short-term impact on tax revenue, but the positive return on that investment would be huge over a 3 to 5 year period.
3) Give angel investors a tax credit for making seed investment into start-up businesses. This will give angels a reason to invest in high risk start-ups that will employ people, pump money back into the economy, and support local entrepreneurs. Not every business will make it, but all of the capital would go back into the economy and the survivors will generate tons of revenue for the state in the future.
4) The plans need to be kept stupid-simple. Our politicians have used 1,000+ page complex legislation to hide things that serve their personal agenda. The majority of any current pro-growth incentives are hidden deep in legislation so that entrepreneurs either don't know they exist or they have to pay a consultant lots of money to take advantage. The government needs to simplify and make the incentives available to the common folks.
When it comes to driving positive change, there is nothing more powerful than giving people the opportunity to pursue life, liberty, and the pursuit of happiness. Give entrepreneurs a reason to build companies, create jobs, and make growth-oriented investments. Keep it simple enough to be actionable and then get all of the complex regulation out of their way. If you do this, we will all be able to ride their coattails on a journey filled with growth, opportunity, and prosperity for all.