Shifting the Startup Financing Conversation: Advocacy Week Insights
Each year we’re excited to participate in Startup Advocacy Week. In past years, we’ve organized pitch events and roundtable discussions to help congressional representatives learn about the startups in their communities. Last year, we used this week to announce the Startup Act, a bill that would align workforce development to better support startups. This year, we took it a few steps further by expanding that advocacy to include congress AND the finance industry that startups depend on.
The Reality of Startup Financing:
While many are engrossed in the "VC winter" narrative, we need to redirect our focus. The reality is that 83% of startups in America are self-financed, with only a meager 0.5% receiving early-stage venture funding in good years. To put that into perspective, it's a mere 25,000 out of 5,000,000 new businesses created each year. Clearly, the broader conversation we should be fostering revolves around the banking industry, which supports 16.5% of early-stage businesses at an average funding level of $50,000 per business.
Bridging the Gap:
Two years ago, we partnered with financial institutions from around the country to create the Make Startups Launch Ready Certificate. This certificate evaluates entrepreneurs across 75 different skill sectors, establishing a baseline standardization to minimize risks in early-stage capital grounded on character and merit. This week, we've made strides by hosting two enlightening roundtable discussions focusing on the progress, impact, and potential trajectory of this initiative.
Roundtable Highlights
On Tuesday, we hosted Congressman Rick Allen (GA-12) for a discussion with 5 founders and 3 funders. Among the many insights shared, we spotlighted:
The importance of startups in rural communities
Workforce bias against entrepreneurial career pathways
Limitations in supporting startups through SBA loans
Strategies to support startups through the Community Reinvestment Act
Changes needed within K-12 education to encourage experimentation and risk taking
Read more about the round table with Congressman Allen here:
Fast forward to Thursday, we organized lenders and investors as part of our “Make Startups Finance Industry Council”. The highlight? Introducing CofounderOS, our innovative AI cohort management platform designed for Entrepreneur Support Organizations. We delved into the transformative potential of AI in addressing early-stage lending gaps, efficient risk modeling, and skills assessment's direct integration into business planning.
CofounderOS is currently in Beta. If your organization would like to join the beta group, apply here
Or reach out directly to grace@makestartups.com
Conclusion:
The landscape of startup financing is complex and multi-faceted. It's essential we pivot our attention from the narrow VC narrative to the broader financial ecosystem supporting the majority of startups. With collaborations, certifications, and technological innovations, we're paving the way for more inclusive and effective startup financing solutions.
Join Our Mission: How has your startup, or ecosystem faced and overcome financing hurdles? We invite you to share your experiences and insights. Let's collaborate and reshape the startup financing landscape together!
