White House Expands Efforts to Get More Americans Working in Tech

Today, there are around 5.5 million unfilled jobs in the United States. According to the White House, over half of these openings are in technology fields including software development, network administration, and cybersecurity. These are just the current numbers. By 2022, the Bureau of Labor Statistics estimates computer-related occupations will yield more than 1.3 million job openings - openings at major technology companies and yet-to-be-founded startups. Meanwhile, millions of Americans, notably young Americans, are out of work or under-employed. This significant gap inspired the White House’s TechHire initiative, which launched last March. The effort involves education and employer partnerships in dozens of regions across the U.S., all dedicated to training, recruiting, and placing more Americans in tech jobs.

This week, the administration announced it’s expanding the program with a $100 million grant competition for programs focused on supporting more Americans in accessing these high-demand, well-paying jobs with $50 million set aside for 17 to 29-year-olds. The Department of Labor has released the application for these grants and says awards will be made next year. It’s specifically looking for innovative programs that serve Americans who face barriers to entering the tech sector, whether those are educational, geographical or income-based.

The need for these programs is real. As we’ve highlighted and discussed at length, today’s tech sector is far too homogeneous in both its makeup of both employees as well as founders. This is bad for the industry: We know more diverse teams perform better. It’s bad for users: Technology’s tools are used by everyone, so should be developed by a greater diversity of thinkers with different experiences and backgrounds. And as the numbers show, it’s bad for our economy: We simply need more Americans filling these jobs.

Coding bootcamps are among the innovative educational programs this new grant could support. Bootcamps teach students job-ready web development languages at an accelerated pace, usually within a few months. Curriculums are often designed for and highly adaptable to market demand, allowing some bootcamps to boast job placement rates of over 90 percent. Yet, a majority of the students enrolling in coding bootcamps pay out of pocket - many programs are mpt accredited and therefore, ineligible for federal student aid. These students are also predominantly white men with bachelor’s degrees. Grant funding could expand access to these programs for more potential tech workers.

Representatives from the White House discussed the new grant at an event in Baltimore earlier this week, one of the 35 cities, states, and rural areas that have established TechHire-supported programs. Our trip to Baltimore last month showcased the city’s commitment to bringing more residents into its emerging tech workforce. National companies like Under Armour, and newer startups like ZeroFox, are leading the city’s startup ecosystem there. With concerted efforts to train more local talent, these companies could soon have new hiring pools to tap into. As one Baltimore investor told the audience, tech talent is more important to growing local companies than capital.

In NYC with VetTechTrek, Supporting #VetsWhoTech

On Friday, we were honored to join the organization,  VetTechTrek (VTT), on their New York City trek into the offices of ten tech companies.VetTechTrek’s mission is “to build a known path between the military and tech...by breaking the mold of traditional recruiting practices.” Over the course of two days, they brought over twenty veterans, and current servicemembers nearing their military exits, into tech companies, incubators, and coworking spaces to connect them directly with current employees and see first-hand the atmosphere and opportunitiesin the industry. Not only does the experience support veterans by expanding their networks with host companies, but the VTT program supports community building among veteran participants.

At each company stop, the VTT entourage is introduced to a panel of employees with relevant roles, recruiters, and veteran employees. Panelists provided a range of insights for VTT participants, including:

• At a high level, how to translate veteran resumes, what the company is looking for in their employees, and how veterans’ military skills fit into roles at a specific company.
• What veterans should look for in the company they work for, depending on their interests, personal goals, and values.
• How veterans should best position themselves for the jobs they want and the importance of building a network.
• How military experience is an asset—an asset that brings critical skills to the company workforce and diversity that improves the product.

The group visited more than ten tech companies including, Uber, Venmo, and Warby Parker. Seeing very different spaces and business models back-to-back allowed participants to understand the breadth of companies in the tech sector and the importance of finding a company that aligns with their own needs and values. However, what was consistent across the companies visited was the overall feeling that company employees are dedicated to their products and care about making an impact, a feeling very familiar for former and current servicemembers.

It was an empowering afternoon seeing an organization directly strengthening the #VetsWhoTech pipeline. For more information on the trek, read VTT’s recap.

Startup News Digest: 11/13/2015

Our weekly take on some of the biggest stories in startup and tech policy.

#VetsWhoTech on Veterans Week: The passage of Veteran’s Day offered a moment for the tech community recognize the enormous contributions of our service men and women, the lessons we can learn from them, and the plain fact that veterans are very much a part of the tech and startup workforce. We’ve highlighted some of their stories and unique career paths in a booklet that profiles seven successful veterans in the technology industry. Yet, as these stories underscore, the current offerings covered by veterans benefits are woefully outdated. In an oped, Engine Executive Director Julie Samuels called on Congress to fix the challenges facing veterans looking to transition into the tech industry: "Trained as leaders and decision makers in complex situations, many veterans have the fundamentals to quickly learn or adapt problem-solving skills as an entrepreneur launching a startup or an engineer at a tech company.” It’s time policymakers address the limitations of veterans benefits in a changing economy.

Congress' Copyright Listening Tour. Since the spring of 2013, when the Register of Copyrights called for Congress to write “Next Great Copyright Act,” the House Judiciary Committee has held more than 20 fact-finding events to solicit opinions from a variety of stakeholders about what reforms they should pursue. This lengthy “listening tour” took a swing through California this week with stops in Silicon Valley and Los Angeles. The Northern California roundtable featured participants from all segments of the tech sector, from startups and larger tech companies to investors, academics, and advocacy organizations. The conversation was refreshingly in-depth throughout, including a series of exchanges between the Representatives and panelists about the need for fixes to copyright’s statutory damages regime. While participants were generally supportive of the DMCA, they also highlighted the need to address the growing problem of false takedown notices, which disproportionately hurt small companies.

Court Rules ITC Can’t Block Overseas Data Flow. The US Court of Appeals ruled in ClearCorrect v. ITC this week that the International Trade Commission (ITC) does not have the authority to block the electronic transmission of digital data from overseas. The ITC has typically had authority to block the importation of solely material, patent-infringing devices - and the Court confirmed this. This is an important decision because, as Charles Duan of Public Knowledge states, it “helps to ensure that Internet users have unfettered access to the free flow of information that has proved so useful for innovation and free expression.” The entertainment industry, however, is disappointed in the ruling which they hoped would have authorized the ITC prevent the import of pirated movies, books, and other digital goods.

Gig Economy Politics Makes Strange Bedfellows.  Tuesday saw the emergence of an unlikely alliance between gig economy giants and labor groups. In a letter addressed to regulators, the coalition of 37 startups, VCs, labor advocates, and thought leaders called for “a stable and flexible safety net for all types of work […] regardless of employment classification.” The letter presented more of a framework than clear, concrete solutions to the current worker classification conundrum. But the group did highlight the need for easier and more expansive access to the sorts of benefits that are traditionally enjoyed by full-time employees. Notably absent from the letter was Uber, which is embroiled in its own legal battles around this issue.

Clay Shirky on Online Education. In a compelling essay on Medium, Clay Shirky writes that the digital revolution in higher education isn't the future, it is already happening. Millions of undergraduates enroll in online courses every semester and have now for several years. Shirky points out this shift towards online learning is less a pedagogical change than an organizational one that is serving a far wider population of college students than the public conversation about higher-ed tends to focus on. Online education offerings are not only more affordable than traditional college courses, they also meet "a demand for more flexibility by students who have to manage the increasingly complicated triangle of work, family, and school."

Immigration Arguments Making Headlines. A handful of immigration issues made headlines this week. A federal appeals court ruled against the Obama administration's Deferred Action for Parents of Americans (DAPA) plans and Republican presidential candidates sparred over one another's positions on amnesty. Nonetheless, few candidates are discussing proposals to reform or expand the nation's high-skilled immigration system, where problems also persist. This week, The New York Times reported on the particular challenges small companies face in the competition for limited H-1B visas. Large outsourcing companies have flooded the system with requests in recent years and in 2014, just 20 employers acquired 40 percent of the available visas. In other vias news, the Department of Homeland Security is considering amending its Operational Practical Training program to extend the length of time foreign students in STEM fields can remain in the U.S. The agency is accepting comments on this proposed change until Nov. 18.

More Spectrum, Please. Did you know that by the end of this decade, over 50 billion “things” will connect wirelessly - from your thermostat to your car to your fitness tracker? Or that in the same time period, mobile data traffic is projected to increase seven-fold? What about the fact that the federal government controls the vast majority of spectrum, the invisible airwaves that enable these wireless products and services? In the second post in our Broadband Solutions Series, we take a look at why making more government spectrum available for commercial use is essential to improving competition and unleashing the next wave of mobile innovation.  

Broadband Solutions Series: More Spectrum, Please

This is post #2 in Engine’s broadband solutions series where we explore telecommunications policies that encourage entrepreneurial activity. For post #1, click here.

In recent months, Congress has doubled down on efforts to make more wireless spectrum available for commercial use. Committees in both chambers have held hearings, members have introduced bills, the recently passed budget included a spectrum provision, and just last week, the Senate Commerce Committee floated draft legislation that would pay federal agencies to give up their airwaves.

But before we delve too deeply into recent activities, let’s take a step back. The average person likely isn’t worrying about the impending “spectrum crunch.” In fact, most people probably couldn’t even explain what spectrum is. But spectrum—the invisible waves that carry the data for wireless products and services—is essential to our increasingly mobile world.

Spectrum enables everything from mobile phones and wi-fi networks to wearable devices and garage door openers. Demand for these products and services is increasing exponentially. In the U.S., 97 percent of households now have a mobile phone and Ericsson estimates that mobile data traffic will increase more than seven-fold by 2020. The Internet of Things is expected to grow to 50 billion connected "things" by 2020, creating $19 trillion in economic value during that same time period.

All of this growth relies on access to spectrum. And as it currently stands, we are going to need a lot more spectrum to meet this increasing demand and ensure that a number of competitive players can thrive in the mobile marketplace. There’s just one small issue—spectrum is a finite resource, the vast majority of which is held (and often underutilized) by the government.

It is estimated that federal agencies hold between 60 and 70 percent of the spectrum best suited for broadband technologies. In an effort to free up some of this spectrum for commercial use, the National Broadband Plan, published in 2010, called for 500 MHz of spectrum to be made available by 2020. While some progress has been made towards this goal—the AWS-3 auction in March, an agreement in April to allow sharing between the Department of Defense and commercial operations in the 3.5 GHz “innovation band,” and next year’s broadcast incentive auction—there is still a long way to go. By some estimates, the U.S. will need an additional 350 MHz by 2020 to satisfy commercial needs.

If we don’t meet growing demand, consumers and businesses will suffer. When spectrum is limited, phone bills increase, data caps become more stringent, and innovation is hampered. But when spectrum is plentiful, more players can participate in the market and there are improved opportunities for technological innovation.

That’s why Congress should create a comprehensive plan that ensures spectrum needs are met over the coming decades. A strong plan would include a balanced mix of both clearing and sharing, and make available both licensed and unlicensed spectrum. In October, Congress passed a budget that included provisions to require 30 MHz of federal spectrum to be freed up for auction by 2024.  While this is a step in the right direction, it is certainly not enough for the long term.

Fortunately, the Senate Commerce Committee has floated draft legislation, the MOBILE NOW Act, that would flesh out and expand on the budget provisions. The bill requires the government to relinquish a larger amount of spectrum (50 Mhz) over a shorter time period (the spectrum would have to be auctioned by 2020). Additionally, the bill would incentivize agency participation by promising agencies up to 25% of any auction proceeds.

It is our hope that even in today’s partisan climate, adopting a plan to free up federal spectrum for innovation is something that both sides of the aisle can unite behind. High tech startups—particularly those that develop mobile applications—depend on customers being able to access their products via mobile devices and networks quickly and affordably. And spectrum has enabled innovative applications and products like Wi-Fi, Bluetooth, and connected devices to flourish. Finally, increased spectrum and the higher quality service it facilitates allow wireless broadband providers to more effectively compete with their wired counterparts, improving competition in the overall broadband market.

American leadership in the wireless space and the health of our broadband ecosystem depend on a reliable supply of commercial spectrum. Congress should redouble its efforts to provide sufficient access to this fundamental input to mobile innovation.

Expanding Opportunities for Foreign STEM Grads

Today, over one million students from foreign countries are pursuing their educations in the United States. And according to the Department of Homeland Security (DHS), about 38 percent of these students are studying in STEM fields, earning degrees in one of the fastest-growing sectors in the American economy. Despite the demand for STEM-educated workers, many of these students have limited options if they want to remain in the United States after graduation. One of these options, the Optional Practical Training (OPT) program, extends the F-1 student visa for a short period to offer graduates a runway to gain additional on-the-job skills, and hopefully, secure a longer-term visa sponsored by an employer. Last month, DHS announced it was reviewing this program and proposed to extend this 12 month runway by 24 months, specifically for STEM graduates.

Engine supports the proposed OPT extension for STEM-educated graduates. It may seem like a nominal change, but this extra time could radically change the career prospects for many of the world’s most talented young workers. For careers in information technology and software engineering, this kind of on-the-job, applied training is an important aspect of a post-graduate education. Further, by granting F-1 visa holders slightly more time in the U.S., these graduates may also have a better shot at finding an employer willing to sponsor a visa for more permanent work authorization.

Foreign students compete fiercely for admission into American universities, where they’re exposed to some of the world’s best technical and entrepreneurial training. Yet more often than not, it’s illegal for them to remain in the U.S. and dedicate their talents to American companies or even launch their own new ventures here. It makes no sense for the U.S. to continue training the world’s brightest and best, only to send them back home or to other countries with more welcoming immigration policies. While there remains a desperate need for large scale reform to allow foreign students to remain in the U.S. full time to contribute their much needed abilities to growing the U.S. tech economy, the OPT extension is an important step towards helping the U.S. retain talented individuals.

Share your support for the proposal with DHS on or before November 18, 2015 by submitting comments here.

Commemorating Veterans Day and #VetsWhoTech

Here at Engine, we are commemorating Veterans Day by driving and supporting conversation about #VetsWhoTech.

• We launched a booklet that follows the paths of seven successful veterans in the technology industry and calls on Congress to update services provided to veterans to reflect the changes in a 21st century economy.
• We shared many of these stories as part of our “Innovation for All” series on  Medium.
• We hosted a briefing for members of Congress and their staff on Capitol Hill about “Veterans Diversifying Tech”. The event included a panel moderated by Engine’s Executive Director Julie Samuels and featured Todd Bowers (Director UberMILITARY, Uber), Nicole Isaac (Head of Economic Graph Policy Partnerships, LinkedIn), Steve Weiner (Co-­Founder, VetTechTrek), Andrew Kemendo (Founder & CEO, Pair Inc.), and Rob Polston (Recruiter, Amazon Web Services).
• Yesterday, we celebrated #VetsWhoTech in San Francisco with a launch event for our booklet, featuring many of the veterans profiled. (Recap to come!)
• Later this week, we’ll join our friends at VetTechTrek for their visits with over 20 veterans to various tech companies, exposing and connecting them to jobs in engineering, sales, and beyond. (For a recap of their previous treks, visit their Medium page.)

But this is just the beginning. We’re calling on Washington to support policy that would better prepare our nation’s veterans for careers in the tech industry, with relevant training and resources before and after exiting the military.

Our military is made up of diverse, driven individuals with a range of skills and experiences—and a diverse entrepreneur and employee population is key to ensuring the tech economy fosters prosperity, creates jobs, and improves our lives. We look forward to working with members of Congress on policy efforts aimed at strengthening the veteran tech talent pipeline.

Vets Who Tech: Sonny's Story

Throughout the week, we're posting stories from veterans who’ve made strides in the technology industry on our blog and on Medium. You can also find them all here and follow the conversation about how to support more veterans in this growing industry at #VetsWhoTech.

Sonny Tosco sounds like a typical Silicon Valley tech entrepreneur. He grew up in the Bay Area, has an engineering degree from a good school, and a strong entrepreneurial spirit. However, his network and story differ from other Silicon Valley rising stars: he is a West Point graduate who was deployed on three tours of duty before launching his business.

Sonny graduated from West Point in 2006, where he studied systems engineering. After graduating, he was deployed on three tours of duty as an Army Captain: Bahrain in 2008, United Arab Emirates in 2009, and then finally back to Bahrain during the Arab Spring in 2011 as an Army chief of operations, overseeing nearly 200 troops.

All the while, Sonny dreamed of starting his own business upon returning from duty. Initially, he contemplated pursuing an MBA, thinking it would be the best way to learn the business skills he required. However, by the end of his second tour, he recognized the degree may not be worth the time commitment. "When I was in service, I always had an entrepreneurial drive, and I didn't want to be sidelined for two years. I wanted to be in it already," says Sonny. Instead, he started reading all of the publicly available materials from Stanford’s MBA program.

Upon returning to civilian life, Sonny took a sales job at a publishing company. He was unsatisfied with his work and still eager to build his own venture, but realized that despite being in the Bay Area, just miles from Silicon Valley, he lacked a network of like-minded and tech-focused entrepreneurs.

In an effort to build these relationships, Sonny started attending networking events, up to four a week, including the Lean Startup Conference and TechCrunch’s Disrupt. These experiences provided him with opportunities for finding mentorship, building a strong and supportive network of likeminded individuals, and learning negotiating skills.

At one tech event, Sonny met his future chief technology officer, a highly experienced mobile developer with extensive startup experience. Finding a technical leader was key, because Sonny lacked the financial resources to pursue the coding education required to build an app on his own. Most programs covered by GI benefits would take years to complete.

The two of them began to develop the idea for what would later become Limelight Mobile, a social app that allows users to request real time images from others anywhere in the world. The idea was inspired by Sonny’s experience in the army; he’d enter conflict areas with incomplete and sometimes inaccurate reports of ground activity. Yet he knew that information was available through the power and connectivity of mobile phones. The company officially launched in April 2014, and in just over a year, Sonny has hired five full-time employees.

Vets Who Tech: RaeAnne's Story

Throughout the week, we're posting stories from veterans who’ve made strides in the technology industry on our blog and on Medium. You can also find them all here and follow the conversation about how to support more veterans in this growing industry at #VetsWhoTech.

When RaeAnne, an intel officer in the Army, got out of the military in 2012, she never envisioned herself working at a tech company like Facebook. During her time in the Army, she had been a company commander managing 100 people, and deployed to both Afghanistan and Iraq where she analyzed data to inform operations on the ground. Up until that point, Facebook had played a different, but crucial, role in her day-to-day life: while she was deployed in Afghanistan, it was the lifeline between RaeAnne and her husband, who was serving in Iraq.

After leaving the Army, she and her husband made the move from Kentucky to New York City, where he could attend business school using his GI benefits. RaeAnne started at an event marketing job at the New York Stock Exchange. As she worked with client companies going public, she was particularly excited by her tech startup clients, such as LinkedIn and Twitter.

When she and her husband moved to Silicon Valley in 2014 for his new job at LinkedIn, her next career move wasn’t clear, but she came across an exciting opportunity. The COMMIT Foundation, a non-profit that helps veterans transition to the civilian workforce, offered to cover the $12,000 tuition for an immersive training program for people who want to work in startups. She took the opportunity as a chance to build relationships with employers in the tech industry, understand startup culture, and strengthen her skills in sales and business development. However, “Without the scholarship, I couldn’t have afforded paying $12,000 and not earning an income for 12 weeks,” she says.

The Tradecraft program gave RaeAnne the foundational skills she needed, but it also took a friend championing her from the inside, some coaching sessions on the Facebook sales pitch and business, as well as several exchanges with multiple recruiters at Facebook to finally land a position. It wasn’t easy: “Not a ton of vets were being hired at the time.” Many recruiters don’t know how to translate a veteran’s resume, and they may not want to take a risk on a candidate. Her friend at the company had to work hard behind the scenes to interpret RaeAnne’s military background for recruiters and hiring managers in terms, skills, and experience they could understand and translate into a sales role.

Now she is in a position that draws on her experience old and new. In the military, RaeAnne was required to analyze data, paint the current landscape, and infer appropriate decisions for senior commanders. Facebook requires that she fulfill similar responsibilities, but with a focus on optimizing advertising campaigns and advising decisions for startup clients to help grow their business—emphasizing, as the military did, the importance of teamwork and camaraderie along the way.

Startup News Digest: 11/6/2015

Our weekly take on some of the biggest stories in startup and tech policy.

More Eyes on EU Data Laws. Congress examined international data issues at two separate hearings this week, covering everything from cross-border data flows to U.S. surveillance reform. But the main focus was the recent EU safe harbor decision. Negotiators have until the end of January 2016 to find a replacement for safe harbor. However, businesses of all sizes are already beginning to weigh whether they should simply move their data to European servers over concerns that alternative compliance mechanisms may not be valid. We’ve noted on our blog (and others agree), forced data localization would be incredibly costly - especially for smaller companies - and would have a chilling effect on internet innovation. We’re tracking.

Pros and Cons in SEC’s Crowdfunding Rules. The release of the SEC’s long-awaited investment crowdfunding rules is a huge victory in itself: it facilitates an entirely new form of fundraising for cash-strapped startups. But, are the rules themselves any good? We’ve written previously about changes we wanted to see to the proposed crowdfunding framework, and the SEC’s rules incorporate a few of the items on our wishlist. Specifically, funding portals are now allowed to subjectively decide whether or not to list certain companies on their platforms and may take an equity stake in issuers, too. But, while the new rules ease some of the high disclosure burdens of the proposed framework, they do not go far enough to make investment crowdfunding affordable for small companies. A more detailed look here.

Comprehensive Immigration Reform: Not Happening. Earlier this week, newly elected Speaker of the House Paul Ryan confirmed a suspicion most immigration reform advocates have sensed for years now: that the House will once again refuse to consider comprehensive immigration reform legislation. “I do not believe we should advance comprehensive immigration legislation with a president who’s proven himself untrustworthy on this issue,” Speaker Ryan announced emphatically on “Meet the Press” and repeated in an op-ed Tuesday. But while we won’t expect to see immigration reform on the legislative agenda, we at least expect to hear about it in the 2016 election cycle.

Anti-Airbnb Measures Fails in SF. On Tuesday, San Francisco voters struck down a measure that aimed to curb Airbnb rentals (and those offered by other homesharing services) in their city, where the convoluted conflict between tech and housing is alive and well. Winning the the vote 55-45, Airbnb far outspent its opposition with an $8 million television, billboard, and canvassing campaign against the measure. Among the lessons learned from its victory? Airbnb representatives have said its user base of hosts and guests is willing and ready to mobilize on the company’s behalf, a movement we could see in more cities as Airbnb and other companies come up against new regulatory challenges.

Internet for Everyone in Arkansas. The Arkansas legislature has promised it will have a plan to deliver high speed broadband access to every home, business, and institution in the state by October 2016.  The “call to action” was inspired by similar broadband expansion efforts in nearby states like Kentucky and Tennessee. Arkansas’ House speaker noted that broadband “has become the 4th rail of economic development. It is just as important as your transportation infrastructure, your educational and workforce infrastructure, your tax structure.” We couldn’t agree more and are pleased to see states acting to ensure all of their citizens have access this essential resource.

Former Twitter Engineer: Diversity is Difficult. An essay by a former lead engineer at Twitter is gaining momentum and attention, highlighting the challenges the tech industry continues to confront in making its workforce more inclusive. Leslie Miley recounts his efforts to increase employee diversity at the company, describing frustrating conversations with senior engineers who referred to diversity efforts as “lowering the bar.” The tipping point for Miley was when he pitched his proposal for hiring a ”Diversity Engineering Manager” and was met with suggestions from higher-ups that underscored “the unconscious tendency to ignore the complex forces of history, colonization, slavery and identity.” It was the culmination of these conversations and the refusal by leadership to acknowledge their own “blind spots” that drove Miley to leave.

Podcasting Tech Policy on a16z. Engine Executive Director, Julie Samuels, spoke with Techdirt’s Mike Masnick and the host of the Andreessen Horowitz podcast earlier this week. Together, they covered a “whirlwind tour of current policy issues in tech  -  from patents and IP in China to cybersecurity, privacy, and Safe Harbor in Europe…And the gig economy, talent, and immigration.” That’s a lot of tech policy, and all in under 60 minutes. Listen here!

#VetsWhoTech. In anticipation of veterans day, Engine is highlighting the success stories of veterans who’ve made strides as developers and founders in the tech industry. These stories showcase the great potential of this community to become leaders in the industry, as well as the ways in which government support for their efforts is falling short. Follow the series on Medium.

Vets Who Tech: Carly's Story

Throughout the week, we're posting stories from veterans who’ve made strides in the technology industry on our blog and on Medium. You can also find them all here and follow the conversation about how to support more veterans in this growing industry at #VetsWhoTech.

As a communications officer in the Army, Carly DaCosta was integral to making sure the military stayed connected in the field and in homeland. She set up the technology necessary at bases in Alaska that enabled units to talk to one another: computers, landlines, networks, and cell phones. Though a nuclear engineer by training, with a longtime interest in technology, she wasn’t certain what was next for her after leaving the military.

She chose to pursue an MBA, a move she thought would help her transition to civilian life. Following graduation, she began working in the financial industry as an account manager. In her new role, she learned what it means to build a business, how to network, and started to recognize the power of technology in new ways: she knew she wanted to move into the tech industry.

Carly evaluated the jobs that she could pursue in the tech industry and thought skills in computer programming would set her up for success and at least get her foot in the door. As she considered how to get there, she realized coding bootcamps offered her that shorter term investment that a four-year degree didn’t. Her research led her to a 90-day program, an all-women course at Hackbright in San Francisco, where she learned Python, one of the most widely-used high-level programming languages. She found a culture of camaraderie among women who were also new to programming, where participants worked together and had each other’s backs, that provided the environment she needed to succeed.  

The bootcamp style allowed Carly to find a program that suited her desired skill set and personal needs. She did not have four years to go unpaid and provide for a husband and a toddler. She “was interested in learning the practical side of engineering first and, after speaking with people who had gone through bootcamps versus the four-year [computer science] degree, it seemed the bootcamp was the way to go. Instructors at the bootcamp are in-industry and their curriculum changes with what’s hot.” It was clear that a university experience wouldn’t give her the entirely hands-on approach she needed to jumpstart a skillset and a career change. And instead of four years of study without pay, she sacrificed only six months of pay—three months of learning and three months of job searching.

As Carly puts it, bootcamps provide an important option for those wanting to jumpstart their career in the tech industry, including veterans transitioning into civilian life. For Carly, this jumpstart meant finding the ideal business operations role that valued both her engineering experience as well as relationship management expertise from her time in finance and the military. She now works at the Director of Operations as a database startup, Fauna DB.

The Good and the Bad in the SEC's New Crowdfunding Rules

It’s been almost a week since the SEC released its long-awaited rules implementing the investment crowdfunding framework established under the JOBS Act more than three years ago. Now that everyone has had a chance to digest the nearly 700 page document, we can begin to evaluate the merits of the SEC’s rulemaking. While the mere fact that investment crowdfunding is legal in the U.S. is an historic accomplishment that startups everywhere should take time to celebrate, there is more work to be done to ensure the crowdfunding market achieves its full potential.

At a high level, the rules the SEC released last Friday are a definite improvement on the proposed rules from 2013. The final rulemaking clarifies a number of the proposed rules’ ambiguities and inconsistencies and corrects a few important deficiencies. The most important change is probably the SEC’s decision to permit funding portals—the sites that host crowdfunding campaigns—to selectively curate which issuers may list on their sites. Because funding portals are barred from providing “investment advice,” the SEC originally planned on barring portals from applying subjective criteria to decide which issuers to list, as this curation could have been perceived as an implicit recommendation that the listed issuers were better investments than those the portal rejected. As we’ve written previously, so long as portals provide clear disclaimers about the inherent risk in investing in any startup, weeding out obviously bad companies would only serve to improve investor safety. Failing to permit funding portals to take on this important investor protection function could have spelled disaster for the nascent crowdfunding industry.

The SEC also made the wise decision to permit crowdfunding portals to take equity stakes as compensation from the issuers they list. For cash-strapped startups, awarding stock in lieu of cash is a common practice for employee retention and even third party vendor compensation. Allowing portals to take equity helps lower upfront costs for startups seeking funds through the crowd and helps align portals’ incentives with those of issuers and investors. Similarly, the SEC made incremental steps to help lower certain reporting costs for crowdfunding issuers. The Commission removed the requirement for issuers to file audited financials in annual reports and permitted first-time issuers seeking higher crowdfunded raises to submit reviewed—rather than fully audited—financial statements prior to launching a campaign.

Any rule change that lowers the cost of raising capital for crowdfunding issuers will help make crowdfunding more attractive to startups. This in turn, will make crowdfunding safer for investors, as an unduly high cost of capital will mean that only the riskiest of companies will use crowdfunding to satisfy capital needs. However, the SEC failed to go far enough in addressing the high cost of capital, particularly for deals at the lower end of the market. Despite small changes to the disclosure requirements, the cost of submitting pre-campaign financial statements and filing annual reports in perpetuity will likely make crowdfunding too expensive for issuers seeking less than $100,000. Considering the small startups that would most benefit from using crowdfunding as a source of initial seed capital will not have any financial history to report in formal financial statements, requiring such companies to expend scarce resources preparing such useless documents seems foolhardy. The cost to small issuers is compounded by the SEC’s failure to include a “testing the waters” provision that would allow startups to informally gauge investor interest before committing the time and money to launching a campaign. Considering around two-thirds of crowdfunding campaigns fail, incurring high upfront disclosure costs is an even riskier proposition for young companies.

The startup community should be thrilled that the SEC finally acted to make investment crowdfunding a reality and that in doing so, it addressed some of the concerns that entrepreneurs and investors raised with the original proposed rules. But, unless and until policymakers take steps to lower the cost of raising seed capital through crowdfunding, the impact of investment crowdfunding on the startup market will likely be modest. Nonetheless, a slow start to investment crowdfunding in the U.S. shouldn’t be taken as a sign that the promise of crowdfunding was overstated; rather, it should serve as a reminder that more work needs to be done to realize crowdfunding’s full potential. We’ll be watching closely.

Vets Who Tech: Nick's Story

Throughout the week, we're posting stories from veterans who’ve made strides in the technology industry on our blog and on Medium. You can also find them all here and follow the conversation about how to support more veterans in this growing industry at #VetsWhoTech.

When Nick Mastronardi transitioned out of the Air Force in 2014, he knew he wanted to start a company. Even though he was able to serve in senior positions in the Pentagon and White House, there was one assignment that forged his desire to build a business. “I was an Economics professor at the Air Force Academy, and from teaching knew small businesses and startups were the engine to and an indispensable component of our economy.”

“I wanted to make sure military members were implementing representative and crowd-sourced public policies.” Out of this idea came POLCO, a political participation platform that allows citizens to find, learn about, and participate in their public policies. “I wanted to create a platform where the best minds in our country could wrestle the day’s most important policy debates in front of citizens to win their favor.”

Having already earned a PhD in Economics while serving, Nick knew he really needed private sector experience to make his dream a reality. Additionally, with two young children, Nick knew he couldn’t be as cavalier as someone with greater financial flexibility. After some exposure to the community through TechStars Patriot Boot Camp, an intensive three-day program that provides veterans with entrepreneurial education and mentorship, and a year at Amazon, Nick was accepted to the Seed Sumo tech accelerator in Bryan, TX. He decided he was ready to take the leap and left Amazon to move to Texas and start POLCO in the spring of 2015.  Since then, POLCO’s website has launched and the company is making progress.

Nick would like to be able to put some of his GI benefits towards POLCO, but the rules around GI benefits don’t allow for this. “I have over $100,000 of GI benefits going unused right now. Money that I earned and want to use in an impactful way,” he says. “The current GI Bill blanket policy is not adequately flexible to support veterans seeking entrepreneurship instead of school, even though they are arguably of comparable value.”

In a time of less financial certainty for his young company, Nick would use his benefits towards a VA home loan, which would provide more stability for his family. Even though Nick has good savings, great credit, and a history of private-sector earning potential, it’s very tough to get a VA or any type of home loan until he has a two-year track record of self employment. “One thing I was really looking forward to for my family following my active duty time was growing some roots in a community.”

Military experience uniquely prepares veterans for entrepreneurship and roles in the tech economy—but financial constraints for transitioning service members disincentivize veteran participation in the startup economy. Because of this unique preparation, Nick is committed to hiring veterans at POLCO. In fact, his entire team is composed of veterans.

As Nick puts it, “I think one of the most valuable lessons from the military is learning how to deal with adversity, face challenges, and ultimately expand your frustration tolerances. As a startup founder or employee, you are directly responsible for the fate of your company, which is exhilarating with growth and frustrating with plateaus. During these periods you rely on your ability to deal with those ups and downs. Military adversaries don’t slow down for you out of sympathy and neither does the market so you always have to keep charging.”

Cities Support Immigrants as Congress Refuses to Act

Earlier this week, newly elected Speaker of the House Paul Ryan confirmed a suspicion most immigration reform advocates have sensed for years now: that the House will once again refuse to consider comprehensive immigration reform legislation. “I do not believe we should advance comprehensive immigration legislation with a president who’s proven himself untrustworthy on this issue,” Speaker Ryan announced emphatically on “Meet the Press.”

The pronouncement was disappointing, but not surprising. Comprehensive immigration reform—which includes considering amnesty for the country’s 11.5 million undocumented immigrants, funding border security measures, as well as updating the nation’s high-skilled visa system to reflect changing economic demands—has long been a contentious political issue. Yet while comprehensive reform remains a pipedream until at least 2017, immigration reform advocates can look beyond Congress for incremental signs of progress.

The Partnership for a New American Economy, for instance, is highlighting the work being done in cities across the United States to welcome and support immigrants for their noteworthy contributions to these metropolitan areas. Two recent reports highlight immigrants’ impact on the local economies in Cincinnati and Denver. In addition to contributing billions of dollars in spending power, the immigrant community is particularly important to these cities’ tech industries. In Cincinnati, foreign-born workers represent more than 10 percent of local STEM workers, 6.8 percent of the high-tech workforce, and 11.3 percent of all information technology workers. In Denver, more than one in four professional, scientific, or technical service workers are foreign-born.

Other municipal leaders and business communities have recognized these positive results. In late September, the Greater Des Moines Partnership, a central Iowa business alliance, announced efforts to develop a plan to attract more immigrants to the region in order to boost the area's workforce. In Tennessee, where cities like Nashville have seen the foreign-born population double since 2000, a non-profit called Welcoming Tennessee was established in 2005 to highlight immigrants’ contributions to the local economy. The Atlantic reports on how  Welcoming Tennessee spurred a wider movement: “Welcoming America” is now a national network of organizations that help immigrants navigate their new homes and identify resources to help with everything from filing taxes to starting a business.

Earlier this year, we also wrote about several innovative models that support foreign-born entrepreneurs building their companies here in the U.S. The Entrepreneur in Residence program, pioneered in Massachusetts, has recently expanded to Colorado. A new startup fund called Unshackled enables immigrant entrepreneurs to focus on their new ventures by sponsoring their visas.

Finally, some of the President’s executive actions, (the purported reason Speaker Ryan refuses to move forward with comprehensive reform), announced about a year ago, could soon be implemented, making slight improvements to the pathways for immigrant entrepreneurs. United States Citizenship and Immigration Services (USCIS) heard from entrepreneurs, investors, and startup advisors earlier this year when considering new guidelines for granting work visas. We hope to see these guidelines officially adopted soon to create more room for immigrants to start new companies and create new jobs here in the U.S.

As the White House initially stated in its announcement, “there is no substitute for legislation to fix our broken immigration system,” but while we wait for 2017, local policymakers and forward-thinking business leaders shouldn’t be deterred from finding ways to support immigrants and recognize the undeniable contributions they make to this country, particularly as innovators and entrepreneurs.

Taking on Patent Trolls in the States

We are pleased to announce the latest paper from students at the Juelsgaard Intellectual Property and Innovation Clinic at Stanford Law School: “How States Can Fight Patent Trolls.”

Some context: the patent troll problem has gotten so bad that states are trying to come up with their own legislative fixes that fall within their jurisdiction.

This paper, by Marta Belcher, John Casey, Madeleine Laupheimer, and Brian Weissenberg, takes a comprehensive look across legislation passed by states to target patent trolls. They compare the provisions, the type of behavior the bills try to limit, modes of enforcement, as well as remedies and exemptions. The paper then goes on to analyze lawsuits brought by various state attorneys general under consumer protection laws and based on the outcomes, makes recommendations for lawsuits going forward.

These efforts at the state level highlight the need to address the patent troll problem, but state legislation can only do so much. The authors conclude, “Because bad faith must be asserted in order to avoid a state law cause of action being preempted by federal law, states can only really fight the egregious trolls that explicitly lie in their letters. In order to fully address the patent troll problem—a multidimensional problem of which frivolous demand letters make up only part—Congress must act.”

“Vets Diversifying Tech”: Bringing the Conversation to Washington

In January, Engine launched the Diversifying Tech Caucus, a bicameral, bipartisan Caucus that’s now grown to over 30 members committed to increasing the number of women, minorities, veterans, and other underrepresented groups in the tech sector. Since then, Engine has hosted briefings on the Hill that further this conversation. This week, in light of Veterans Day, we hosted a briefing to highlight the work of veterans in the industry and how Congress can better support them. Moderated by Engine’s Executive Director, Julie Samuels, the panel included Todd Bowers (Director UberMILITARY, Uber), Nicole Isaac (Head of Economic Graph Policy Partnerships, LinkedIn), Steve Weiner (Co-Founder, VetTechTrek), Andrew Kemendo (Founder & CEO, Pair Inc.), and Rob Polston (Recruiter, Amazon Web Services).

The conversation among this group of veterans and tech industry leaders demonstrated the huge potential of the veteran community to succeed in this sector . As Andrew Kemendo put it: “We need strong executors starting companies—and I see no better people for this than veterans.” It also highlighted the ways our policies for veterans fall short. Here’s what we and the audience of over 60 Hill staffers and friends from the veteran community heard:

• We must give veterans a running start BEFORE exiting the military to make them competitive candidates for tech industry jobs. The one week Transition Assistance Program is not enough for transitioning service members; currently, the Department of Labor’s employment workshop is a one-size-fits-all program that still leaves a lot of guesswork for newly transitioned veterans trying to get into the tech industry. Beyond simply accessing more information about appropriate job opportunities in the tech industry, service members should be encouraged to take up additional training or internships before they leave the military and be provided with the support to evaluate career options (and the skills they require) before they transition. For example, Amazon Web Services is partnering with Microsoft to hire some of the graduates of their Microsoft Software & Systems Academy—a 16 week development initiative focused on developing tech-ready, active-duty service members.

• Veteran entrepreneurs need a better network and access to capital. When members transition out of the military, they have little money in the bank and have a far smaller network of potential funders and co-founders than potential entrepreneurs who graduated from Stanford or worked at Google. This puts veteran entrepreneurs at a disadvantage. In order to make the connections they need to build funding opportunities, they need access to mentors and people with experience. The VET Act, introduced by Senators Moran and Tester, allows veterans to use GI benefits towards starting a business, but these entrepreneurs also need experienced funders and advisors that have started businesses and can provide connections to bigger networks, improving access to capital.

• GI benefits aren’t currently supporting the veteran tech talent pipeline. For example, “skills academies” (such as coding bootcamps and hackschools) are not clearly covered by the GI Bill, though these programs are well recognized by the tech sector and would improve the bridge between military resumes and tech company job descriptions. In addition to being a resource for brushing up on valuable technical or business skills in pursuit of landing a job in the tech industry, skills academies also provide a hiring partner network that enables an easier transition from student to employee. VetTechTrek organizes high-impact trips for veterans to leading tech companies and expose veterans to opportunities for training that can jumpstart their career in the tech industry— and skills academies, as they put it, provide “an environment very similar to a military qualification process: a focus on prerequisites and only the essential skills to complete the task.”

Veterans have notoriously been an underrepresented community in the tech sector. But this panel (as well as the veterans featured in our latest booklet “Supporting Vets Who Tech”) demonstrated that there is room for the government to proactively make changes, working in conjunction with industry players, to improve veterans’ access to jobs in the tech industry. We look forward to working with members of Congress on policy efforts aimed at strengthening the veteran tech talent pipeline.

Vets Who Tech: Isaac's Story

Throughout the week, we're posting stories from veterans who’ve made strides in the technology industry on our blog and on Medium. You can also find them all here and follow the conversation about how to support more veterans in this growing industry at #VetsWhoTech.

After five years on active duty with deployments to both Iraq and Afghanistan, Isaac Elias left the U.S. Army in 2009. As he transitioned out of the military, he found that a large portion of existing career development resources were available through formal partnerships with traditional industry, like manufacturing or logistics. “Those roles just didn’t make sense for me,” says Isaac, who realized during his deployment to Iraq as a human intelligence coordinator that he thrived in small, agile teams.

So Isaac decided to use his GI benefits to attend college. He was able to finish a degree in business administration at California State University in just three years, and in 2012 he began looking for a job. During school, Isaac had started teaching himself programming and coding skills. He had been inspired by professors who extolled how technological advances were dramatically changing business. However, from November 2012 to April 2013, Isaac tried to find a job and couldn’t get any traction. “I had a business degree, but I wasn’t getting anywhere with that. Then I had these self-taught technical skills that I was passionate about, but no formal training.”

In the spring of 2013, Isaac learned about General Assembly (GA), an educational institution that offers a variety of technology-focused classes. He applied and was accepted into their 12-week full-time Web Development Immersive (WDI) program—an opportunity to receive that formal technical training he lacked. With three young children at home, Isaac knew the program would be a commitment, in terms of both time and money.

Isaac accumulated $25,000 in debt on four separate credit cards to pay for the program and his family’s living expenses while he was in school—a debt that Isaac is still repaying two years later. “It was a big commitment, and I wasn't sure that I could manage the whole thing. But it was absolutely worth it.”

Following graduation from the GA program, Isaac was hired as a full-stack developer at a Pleasanton, CA based startup, Milyoni, which builds tools to make video watching and sharing more social. Since then, he has held positions at two other companies, moving into higher-paying, more advanced roles each time. His current job as a software engineer for True Link Financial pays almost three times what he could have made when he was looking for a job with just his business degree. And on top of that, he is frequently contacted by recruiters.

Isaac is proud of how far he’s come. He should be. But he noted how he felt like he had to fight and break down barriers to achieve these goals. “People who have been in war zones have skills that are applicable to startup world: we are dedicated, disciplined, entrepreneurial. We know how to build and manage teams. We take assignments and commitments seriously. We know how to deal with less-than-ideal surroundings, fatigue, hunger, and stress. We just need the right training and the relationships to get into that world. It shouldn’t be that hard.”

Vets Who Tech: Aaron's Story

Throughout the week, we're posting stories from veterans who’ve made strides in the technology industry on our blog and on Medium. You can also find them all here and follow the conversation about how to support more veterans in this growing industry at #VetsWhoTech.

When Aaron Saari applied to West Point in 2002, he was well aware that in a post-9/11 world a military deployment would immediately follow his graduation. “Our whole class knew what was coming after graduation,” he says. Indeed, Aaron did end up deploying twice after graduating from West Point in 2007. He spent 15 months in Iraq and another six months in Afghanistan as an officer. It was these experiences, leading a team of soldiers halfway across the world, that inspired him to become an entrepreneur.

“I’m less than a year out of college and at 23, I’m given 30 people—some older than me, some younger than me, some men, some women—and $15-20 million worth of equipment, and I’m told to do all these things I’ve never done before…if that’s not being an entrepreneur, I’m not sure what is.” His experience in the field also taught him risk analysis, leadership, how to be nimble, and how to pivot quickly in life-threatening situations.

Upon returning stateside, Aaron recognized a further career in the military wouldn’t entail the same kinds of responsibilities he had been afforded as an officer on the battlefield—it looked a lot more like a desk job. Growth opportunities seemed riddled with layers of bureaucracy and hierarchy, a stark contrast to the relatively flat and merit-based culture of technology entrepreneurship.

All the while, Aaron had been following and studying startups and successful entrepreneurs. While still in the military, Aaron read Tim Ferris’s The 4-Hour Workweek. “It was a paradigm-shifting book,” Aaron explains, “It gives you a glimpse into the future of work and how the global economy operates.” He picked up other ideas and skills from books on entrepreneurship, the lean startup model, and Internet marketing, teaching himself what it would take to eventually start his own business.

“When I got out, I started building the business,” Aaron says.

To pursue a career change from a military officer to a technology and marketing entrepreneur, Aaron first considered some of the resources the GI Bill provided. He could earn an MBA or take advantage of business education programs offered by Veterans Affairs and the Small Business Administration. But ultimately, he didn’t want to spend two valuable years sitting in a classroom gaining a graduate degree, and the other resources available to veterans just seemed outdated. “The concepts that they’re teaching are not the way the world works any more.”

In addition to the books he had read, Aaron also came across online resources covering the latest trends in digital marketing, data analysis, and usability testing. He sought out informal, online communities of veterans who had started their own businesses or worked at fast-growing technology companies. “I found people that were doing things, doing things well, doing things quickly... [who] created their own networks.” Aaron found these resources were relevant and easily available to prepare him to launch his own business and take a lead role at a growing startup.

Today, he runs Base of Fire, a growth and marketing consultancy for small businesses, but that’s not all. After focusing on Base of Fire for nine months, Aaron attended a startup event in San Francisco where he met the founder of a new company called Remoov—an online platform that helps people declutter their homes by integrating pickup, moving, and donation services. Soon, Remoov was recruiting him. Realizing that scaling operations at a young company would offer him even greater experience and exposure as a burgeoning tech entrepreneur, Aaron joined on as head of operations.

Aaron continues to tap into networks of veterans in the tech and startup world as he seeks out advice in growing and expanding his latest ventures. As a business leader, he also wants to hire veterans. However, he worries many veterans transitioning to the civilian workforce aren’t getting the education they need, noting that many of the officially accredited programs haven’t kept up with the pace of technological and business changes.

One thing is certain though—the veteran community is a unique workforce because more than anyone, they know how to “adapt and overcome,” Aaron says. “We’re a community of problem solvers. We’re going to find a way to get things done.”

It’s Time We Expand Veterans Benefits for the 21st Century Economy

You can also read this post on Medium.

Each day, nearly 550 military veterans transition to civilian life looking for jobs. Meanwhile, the technology industry is growing fast, driving up the demand for hardworking individuals who can take on roles in well-paid and understaffed tech fields. Technology itself is also lowering the barriers to entry for entrepreneurs to launch their own businesses, which in turn create new jobs.

Not only is there increasing demand for workers in the technology industry, military veterans are also uniquely positioned for roles in this field. Trained as leaders and decision makers in complex situations, many veterans have the fundamentals to quickly learn or adapt problem-solving skills as an entrepreneur launching a startup or an engineer at a fast-paced tech company.

Unfortunately, many veterans who choose to enter the tech industry—either as an employee or a founder—face major obstacles. One obstacle is the limitation on benefits that cover relevant training, education, and programming.

Federal funding guidelines make it particularly difficult for veterans to access non-traditional, skill-based education programs that are relatively new to the education landscape, but are already producing success stories. These programs provide crucial resources for making tech training accessible to people of all backgrounds, especially those new to the civilian workforce. Not only can these programs provide skills that bridge military experience with roles in the tech sector, but they also provide the tech vocabulary and network that enable veterans to land the job.

Similarly, federal funding guidelines make it hard for veterans to use the benefits they have earned through their service towards building a business. Twenty-five percent of active duty service members report that they would like to start their own company. Many veterans are empowered to create their own jobs and jobs for others. Unfortunately, restrictions around the use of GI benefits preclude them from putting that money toward a startup or un-accredited alternative entrepreneurial education programs that help bring their ideas to reality.

Congress should develop policies that help veterans transition into roles in the tech sector. Growing the diversity of the tech sector and expanding innovation in America depends on it.

Throughout the week, we’ll be posting stories from veterans from around the country who’ve pursued careers in the technology sector following their military service. Each of their stories is unique: some built on tech skills that they had already acquired during their services, others sought to build an entirely new skill base, and several of the veterans profiled here have started their own companies.

Together, these men and women showcase the enormous potential within the veteran community to serve and lead in our country’s most rapidly growing job sector. Yet to accelerate these successes and enable more veterans to enter into this industry, we must do more.

Watch this space for stories from veterans who’ve made strides in the technology industry or find them all here. You can also follow the conversation about how to support more veterans in this growing industry at #VetsWhoTech.

Startup News Digest 10/30/2015

Our weekly take on some of the biggest stories in startup and tech policy.

SEC Finalizes Crowdfunding Rules. At today’s SEC open meeting, the Commission voted to adopt Title III crowdfunding rules, finalizing the last and most highly-anticipated provision of the 2012 JOBS Act. Once the rules go into effect, (180 days after they’re enter in the Federal Register,) any investor can buy equity shares from companies raising capital online, marking a new era of financing for startups and investors alike. As Engine and industry experts have commented, the rules aren’t perfect, but their long-delayed release is the first critical phase in working with policymakers to improving and expanding the crowdfunding ecosystem.

Cybersecurity Bill Passes Senate. On Tuesday, lawmakers voted 74-21 to pass the Cybersecurity Information Sharing Act (CISA). The bill has been largely opposed by the tech community over concerns that the bill’s core information-sharing mechanism would compromise user privacy. Amendments aimed at providing additional privacy protections  didn't garner sufficient support, leaving industry stakeholders and civil liberties advocates frustrated. But the debate will not end here—there is a chance these issues will come up again as the Senate’s bill goes to conference with the House.  We’re tracking.

EU Passes (Bad) Net Neutrality Rules: The tech world's focus shifted to the EU this week, as the European Parliament voted on net neutrality rules that have caused consternation amongst open Internet advocates worldwide. Though the new European-wide rules look similar to rules the FCC passed earlier this year, the EU's regime contains many vague definitions that will allow ISPs to create and exploit loopholes that could render the EU's nominal ban on so-called "fast lanes" ineffective. For example, the rules create an exception allowing ISPs to prioritize "specialized services," but define that exception so broadly that ISPs could effectively create the types of fast lanes that the rules nominally ban. Similarly, while the U.S. rules allow the FCC to evaluate the legitimacy of zero-rating plans on a case-by-case basis, the new EU protocols allow zero-rating. While there may still be opportunities to correct these loopholes going forward, the future of an open Internet in Europe looks uncertain.

EU and US Close on New Safe Harbor: After the European Court of Justice’s rejection of the “safe harbor” that allowed U.S. companies to easily import EU customer data to the U.S., the tech world was left in a state of confusion as to what exactly was supposed to happen next. While the EU and U.S. had been hammering out a new safe harbor framework even before the old one was rejected, news this week that negotiators agreed in principle upon a new frameworks came as a pleasant surprise. Whether the new framework satisfies the ECJ’s concerns and what companies should do in the meantime remain open questions.

New Copyright Exemptions. In what has become a triennial reminder that it's impossible for the law to properly keep up to date with changing technology, the Librarian of Congress this week granted a number of exemptions to a rule in the DMCA that outlaws "circumventing" certain digital locks. This year's exemptions include rules allowing the public to tinker with car software and to jailbreak devices in order to run third party software. Of course, the exemption for security research on cars came way too late to prevent the VW emissions scandal, and the jailbreaking rule was perhaps most notable for fixing an absurd distinction between jailbreaking phones (already legal) and tablets (now legal). It's great that there is a mechanism for updating the law to reflect technological realities, but a system in which you have to wait three years before finding out whether it's legal to install third party software on your tablet needs an overhaul rather than a triennial tweak.

Can Tech Help Copyright? In an op-ed this week, Mike Masnick explores the potential for technology to solve the entertainment industry’s copyright woes. Take Sweden, for instance, where not long ago, piracy was rampant. But with the rise of forward-looking services like Spotify, which calls Sweden home, piracy rates have steadily declined. Policy lessons from other countries, detailed in a recent report, demonstrate that “attempts to reduce piracy by passing strict anti-piracy laws...had little long-term impact on piracy rates.” Instead, policymakers should embrace and support innovative ways to support the creative industry through new technologies.

Amazon Faces Worker Classification Suit. Four former Amazon Prime Now delivery drivers have sued the company, arguing that they were misclassified as contract workers instead of employees with full benefits. The suit is the latest in a long list of ongoing legal battles between on-demand workers and their employers (see Uber & Lyft, Grubhub & others, Postmates & others). As the debate continues around how to best support this growing class of workers, these cases have the potential to completely reshape the 1099 economy and the companies that operate within it.

Campaigns to Talk Tech in Iowa. Engine joins the Cedar Rapids Gazette and the Technology Association of Iowa in inviting Democrat and Republican Presidential contenders to the Iowa Presidential Tech Town Hall in Cedar Rapids this December. Candidates will share their agendas for supporting the innovation economy and take questions from a panel of tech policy leaders and local entrepreneurs. Potential topics include technology innovation, STEM education, broadband access, and entrepreneurship. More information and tickets to this event at PresTechTownHall.org.

Startups on the Hill for Patent Reform. Engine and the Consumer Electronics Association hosted a Capitol Hill fly-in Thursday where we were joined by four startups that have battled patent trolls first-hand. Together, we spoke with eleven Senate offices, including directly with Senators Heinrich (R- NM) and Peters (D-MI), about our support for the Senate’s PATENT Act. We also delivered the letter signed by nearly 200 startups in support of the Innovation Act (House bill) and PATENT Act (Senate bill). These bills would help disincentivize bad actors in the patent system and give startups tools to defend themselves against frivolous patent litigation.

Better Broadband Competition. Startups depend on internet connectivity and benefit from greater competition among providers. Over the next few weeks, we will be highlighting a number of policies that would improve competition in the broadband market and better encourage entrepreneurial activity. Read our first post outlining the series here and stay tuned for more.

SEC Passes Historic Investment Crowdfunding Rules

After more than three years of delay, the SEC has finally passed rules making investment crowdfunding a reality. Considering it’s been so long since Congress passed the legislation authorizing investment crowdfunding, it’s easy to forget how significant of an achievement today’s news represents. For the first time, entrepreneurs can raise capital from everyday investors over the Internet, opening up a vast new pool of funding for startups throughout the country. For the 20% of entrepreneurs who have identified a lack of adequate capital as one of the three biggest challenges they face, the SEC’s passage of final rules couldn’t have come at a better time.

Grand pronouncements about investment crowdfunding’s potential shouldn’t be dismissed as mere hyperbole. Simply put, investment crowdfunding has the potential to revolutionize startup financing and enable new groups of entrepreneurs to participate in the startup ecosystem. The success of rewards-based crowdfunding platforms like Kickstarter and Indiegogo suggests that investment crowdfunding will make it far easier for startups outside of traditional tech hubs in New York and California to raise funds. Consider this: the average venture capital investor resides within 70 miles of his or her portfolio companies, while the average crowdfunding backer resides, on average, 3,000 miles away from the companies they support. With traditional venture funding concentrated on the coasts (75% of all VC funds go to companies based in California, New York, or Massachusetts), investment crowdfunding will enable more capital to flow to emerging startup hubs throughout the country. Similarly, investment crowdfunding has the potential to help fix the tech sector’s troubling lack of diversity. While women entrepreneurs have been excluded from traditional venture funding (female-owned companies are 18.7 percent less likely to raise a successful venture round than male peers), they have found far greater success through rewards-based crowdfunding platforms.

While investment crowdfunding has great promise, much work remains to be done for crowdfunding to reach its full potential. As outlined more fully in the white paper we released earlier this month, a few key changes to the investment crowdfunding regime could go a long way towards making crowdfunding a viable option for smaller companies and the investors supporting them. For example, the current rules impose significant disclosure obligations on issuing companies that may increase the cost of raising crowdfunded capital to a point where all but the riskiest companies will turn to other forms of financing for low-volume raises. As demonstrated by the success of the investment crowdfunding market that developed in the U.K. as the U.S. market waited on the SEC to pass final rules, these additional requirements are unnecessary for investor protection and may unduly inhibit the growth of the crowdfunding sector. Though the SEC’s final rules improve on the disclosure rules in earlier drafts, there’s still more work to be done.

Hopefully, today’s announcement is just the first step towards perfecting the U.S. investment crowdfunding market. For cash-starved entrepreneurs and everyday investors eager to join in the innovation economy, today is a seminal moment. For advocates and policymakers working to ensure that investment crowdfunding fulfills the ultimate promise of the JOBS Act, today is just the beginning. We look forward to working with Congress and the SEC in the future on this important issue.