Startup News Digest 9/4/2018

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Summer is typically a time for rest and relaxation, but for startups across the country summer was a time to meet with policymakers and share their story. As the voice of startups to government, Engine proudly assisted in organizing this year’s Startup Week Across America. Officially held August 20-24, more than 50 House members met with startups in their communities to learn more about the issues that matter most their businesses. Thanks to leadership from Reps. Suzan K. DelBene, Randy Hultgren, Mimi Walters, Yvette Clarke, Susan Brooks, and Jerry McNerney who championed Startup Week Across America, bipartisan meetings were held from coast to coast.

Since launching as a national one-day event in 2012, Startup Week Across America has grown to a week-long celebration of entrepreneurship. It has shown how innovation is flourishing in every corner of the U.S., not just well-known tech hubs such as Silicon Valley, Austin, and New York City. Nearly half new companies are being established outside of the 35 largest metropolitan areas in the United States, according to a 2017 study by TechNet and the Progressive Policy Institute. Startups are an important engine for economic growth and they are in every district in the U.S., helping lawmakers recognize startups’ importance to communities to support legislative measures that encourage small business growth and economic opportunities.

Startups from across different industries hosted meetings during Startup Week Across America. Rep. Tim Walberg (R-MI) went to Ann Arbor for a demonstration from Warmilu CEO Grace Hsia on the startup’s IncuBlanket, which keeps preemie babies warm without electricity in Kenya and India. Rep. French Hill (R-AR) learned about “squishy circuits” at the University of Central Arkansas’ Makerspace with the help of Conductor, a public-private partnership focused on supporting entrepreneurship in Central Arkansas. In Colorado, Rep. Jared Polis (D-CO) met with the 12-year-old founder of Jack’s Stands and Marketplaces. In D.C., entrepreneurs who own or promote startups met with the Small Business Administration's Office of Advocacy and the National Women’s Business Council. 


Didn’t get a chance to meet with your lawmakers during Startup Week? Contact Jen Fox for the tools to host your own Innovation Roundtable. 

Here's What We Talked About

Net Neutrality: Engine joined the chorus of voices challenging the FCC’s repeal of its 2015 net neutralityrules late last year. As we explained in our amicus brief filed in Mozilla v. FCC—written with the help of Harvard University’s Cyberlaw Clinic— startups and their investors rely on the 2015 net neutrality protections to keep the Internet a level playing field where new and small companies with innovative ideas can challenge incumbents. 

Immigration: Access to talent continues to be a major issue for the startup ecosystem. Engine opposed a move from the government that will make it harder for entrepreneurs born abroad to build their businesses in the U.S. In comments to the Department of Homeland Security, we urged the Administration to preserve and implement the International Entrepreneur Rule, which would create a pathway for immigrant entrepreneurs with $250,000 in funding from an accredited American investor or $100,000 from a government agency to start their business in the U.S.

Access to Capital: Making it easier for startups—particularly those outside of San Francisco—to gain funding is a critical goal for entrepreneurship advocates. Startups pushed for changes to existing fundraising rules to make it easier to obtain seed capital through crowdfunding platforms and retail investors through changes to the SEC’s accredited investor definition. Startups met with the SBA’s Office of Advocacy and National Women's Business Council to shared concerns about improving access to capital for all entrepreneurs, including women and minority groups. 

Patents: Ensuring balance in the U.S. patent system is critical for startups that need to protect their own intellectual property as well as those that need to ensure they’re not being extorted through patent troll litigation. Engine hosted a fly-in with several companies this summer so they could share their stories about the improvements in the patent system and how recent Supreme Court decisions have helped stop abusive patent litigation.

Online Sales Tax: The Supreme Court’s decision in Wayfair v. South Dakota in June exposed all online retailers to a new fifty-state patchwork regime for online sales tax. As Engine explained in an op-ed this summer, this will place significant additional burdens on e-commerce as startups look to navigate thousands of state and local tax jurisdictions that could be enforced through new state laws.

International: Startups are watching as the U.S. renegotiates a major trade deal between North American countries. As we explained in an op-ed earlier this summer, any trade deal that replaces the North American Free Trade Agreement should preserve the U.S. protections that have made this country the home of the world’s largest and most successful and innovative startup ecosystem.

Engine joined European startup advocacy group Allied for Startups to pen an op-ed urging the Administration to fulfill its commitments to user privacy as Europe conducts an annual review of the Privacy Shield, a cross-border deal that lets companies transfer and store user data across the Atlantic. Startups—which often lack the legal resources big companies have—especially rely on Privacy Shield to get streamlined access to users and grow their businesses abroad.

Engine warned about the negative impact a new “data localization” proposal in India will have on U.S. startups that do business abroad as well as small companies in India that rely on U.S. businesses. The proposed policy would require companies to store any data generated in India—one of the world’s largest markets of Internet users—to store that data on servers in India, which would dramatically raise costs on companies that do business there.