Washington, D.C. – The Economic Innovation Group (EIG) applauds Senators Amy Klobuchar (D-MN), Chris Coons (D-DE), Angus King (I-ME), and Tim Kaine (D-VA) for introducing the New Business Preservation Act to provide a needed capital lifeline to promising startups and entrepreneurs in underserved regions across the nation, many of whom are particularly vulnerable to the current economic crisis resulting from the COVID-19 pandemic.
The Great Recession sparked an unprecedented collapse in new business formation, causing lasting damage to American entrepreneurship. As policymakers consider responses to the current economic crisis, a forward-looking equity support program that strengthens fragile startup ecosystems and boosts underserved entrepreneurs across the nation will be critical to a robust and equitable economic recovery.
“New businesses are essential to the health and vitality of the U.S. economy,” said EIG Vice President Chris Slevin. “The New Business Preservation Act can help to address the disproportional vulnerability of new businesses to this economic crisis by stimulating private investment in entrepreneurs and startups often overlooked by investors. We applaud Senators Amy Klobuchar, Chris Coons, Angus King, and Tim Kaine for their forward-looking leadership on this important issue. This effort builds on successful federal-state partnerships that have supported thousands of businesses across the country, and should be included in Congress’ response to this economic crisis.”
According to the bill’s summary, the New Business Preservation Act would:
- Create a new program at the Treasury Department that will partner with states to invest alongside private venture capital companies in new businesses in areas of the country that do not currently attract significant equity investment in new businesses.
- Give special consideration to businesses created by women and persons of color, who face additional barriers in accessing investment capital.
- Be self-sustaining, with any returns on investment being reinvested in new businesses in future years.
About the Economic Innovation Group (EIG)
The Economic Innovation Group (EIG) is an ideas laboratory and advocacy organization whose mission is to advance solutions that empower entrepreneurs and investors to forge a more dynamic American economy. Headquartered in Washington, D.C. and led by an experienced, bipartisan team, EIG convenes leading experts from the public and private sectors, develops original policy research, and works to advance creative legislative proposals that will bring new jobs, investment, and economic growth to communities across the nation. For more information, visit eig.org.