Business incubators for sharing services were all the rage back in the days of the dot-com bubble (700 for profit, many more non-profit). About that time the bubble burst, causing more than 80% of them to disappear. Now they are coming back, and the best even provide networking, technical leadership, and seed funding, as well as shared facilities and space.

By way of a definition, a business or startup incubator is a company, university, or other organization which provides resources to nurture young companies, helping them to survive and grow during the startup period when they are most vulnerable. The goal of most business incubators today is to strengthen the local economy, and commercialize new technologies. A few are still trying to make money doing it, but it is hard to make money off startups.

Most incubators today provide one or more of the following:

• flexible space and leases, often at very low rates
• business support services for a fee, including administrative support, telephone answering, graphic services, bookkeeping, copy machine access, and meeting rooms
• group rates for health, life and other insurance plans
• business and technical assistance either on site or through a community referral system
• assistance in obtaining funding, or direct seed funding
• networking with other entrepreneurs

Incubators differ from research and technology parks, in that most research and technology parks do not offer business assistance services, the hallmark of a business incubation program. However, many research and technology parks also house incubation programs. Another variation is technology business incubators, which nurture high-tech startups and present a technology oriented variant of business incubators.

To find what’s available in your area, take a look at the National Business Incubation Association (NBIA) web site, and use the lookup tool provided. This organization claims to be the world’s leading organization for advancing business incubation and entrepreneurship. Another sure-fire approach to finding what’s available is to check local university resources – almost every one offers some services along these lines, or certainly can refer you to local alternatives.

The only down-side I have heard is that many business incubators used to be notoriously high-pressure environments where a lucrative exit strategy was more important than the half-baked products. If that’s the toughest problem you face as a startup, then you probably didn’t need an incubator in the first place.

The up-side is that startup incubator programs allow new startups to benefit from the wisdom of other startups and veteran companies through mentoring and by co-existing — in the same office or through the same venture funding — with other startups.

Incubators I hear mentioned most often include YCombinator, led by Paul Graham in Silicon Valley, and the VT KnowledgeWorks Business Acceleration Center at Virginia Tech, led by Jim Flowers. Both provide excellent networking, relationship building, and on-site technical leadership, which I believe sets them apart.

Jim argues that the real value of an incubator is in the relationships, and these work best when the entrepreneur has selected a real market opportunity, and plans to address it in a unique, powerful, and direct manner.

For that reason, he is a strong proponent of screening prospective clients carefully, selecting the best ones, and assuring that they can handle responsibilities, like paying the rent, and “graduate” in a timely fashion to stand on their own two feet.

Thus, if you are looking for an incubator for “free” money and services, you should think again. Look first for people there who can help you, by their introductions, mentoring, and experience. A successful startup is more about the right people than the right amount of money.

In the New York Times of February 23 Janet Yellen, President of the Federal Reserve Bank of San Francisco, is quoted as predicting a slow drop in the U.S. unemployment rate, now 9.7 percent, to 9.25 percent by the end of this year and 8.0 percent by the end of 2011. This is pretty anemic in view of her forecast of 3.5% GDP growth this year and 4.5% next year, a robust performance for a mature economy, though she attributes much of this growth to reduction in inventories rather than growth in sales. Ms. Yellen doesn’t foresee a return to peak economic performance and a corresponding drop in unemployment until 2013. The cause, she says, is clear: an increase in business efficiency and labor productivity, which she says, “is here to stay.”

One has to assume that Ms. Yellen’s prediction of stubbornly high unemployment takes account of Wednesday’s probable passage by the Senate of the $15 billion jobs creation package, which its supporters say will create tens of thousands of new jobs by providing an exemption from payroll taxes to employers who hire people who have been out of work for six months or more, as well as a $1,000 tax credit if those people remain employed for at least a year.

This development follows President Obama’s spirited defense last week of the stimulus package, which he claims has saved or created as many as two million jobs. Never mind any possible flaws in the calculation, and never mind that it is private business, not government, that creates jobs in the private sector. Let’s accept the President’s assertion that the stimulus package, which the Congressional Budget Office now estimates has cost $862 billion, has accomplished what he says. That works out to $431,000 per job created or saved, or about 10 years’ wages for the average employee. That’s a lot of money to save or create a job that could disappear as soon as the incentives expire.

Tax incentives to create jobs generally don’t work. In the late 1980s and early 1990s I helped the government of Botswana design incentives policies to attract foreign direct investment and create new jobs. Botswana’s incentives were as generous as they come: for qualified investments the government would pay 100% of a company’s wage bill in the first year of operation, declining in 20% increments over the following four years. The program initially was a great success, creating over 10,000 new jobs in garment production, automobile assembly, and other light manufacturing. The only problem was that most of these jobs disappeared as the incentives expired, creating a new set of social and economic disruptions. In the late 1990s, after one of the biggest beneficiary companies collapsed, the government realized the cost of the incentives had far outweighed any calculable benefits and scrapped the program entirely. Many other countries have had similar experiences.

By their very nature, incentives of this kind distort business decisions. Investment and employment decisions taken primarily for reasons of government grants or tax breaks instead of a sound business case may generate some short-term benefits, but at the cost of long-term competitiveness. Few people in the Obama Administration have any business experience, so they fail to grasp what is intuitively obvious to most businessmen.

It is impossible to save jobs in declining industries, and attempts to do so typically condemn those industries to a more complete demise. A hundred years ago, some 40 percent of the U.S. work force farmed for a living. Mechanization of agriculture, improved soil and crop management, better roads, and refrigeration changed everything. Today, less than two percent of the population works on the farm, but that small number of farmers produces far more food and feeds many more people at a far lower cost. Efforts to support farmers through subsidies, price supports, and tax incentives have done nothing to increase or even maintain agricultural employment, though they have enriched many large agro-industrial corporations.

Largely as a result of the past 30 years of innovation and investment in information technology, our economy is undergoing a similar shift now, in which manufacturing requires fewer and fewer people to produce more, higher-value goods. For the most part, this is a good thing. If productivity doesn’t increase, neither can wages and living standards.

I have seen garment factories with over a thousand sewing machine operators under a single roof, but these facilities are in Haiti and the Dominican Republic and China, and no incentives will ever bring these jobs back to the United States. My great-grandparents worked in the sweatshops of New York’s Lower East Side, but those jobs went, first to South Carolina, and later to other countries, but they were replaced by better, higher-paying occupations. It can be an otherworldly experience to visit a modern factory, in which a handful of workers with digital controls can run a vast production flow. Any attempt to increase the number of employees with tax credits and other incentives would find few takers, but to the extent that it succeeded it would make these plants less competitive and put the entire enterprise at risk.

This is not an argument for the government to do nothing at all. The Oklahoma sod-busters who moved to California during the Great Depression and the Dust Bowl eventually found jobs in higher-value agriculture and emerging industries like aerospace, without much government assistance but not without wrenching dislocations and horrible suffering. No one wants to see a 21st century repeat of The Grapes of Wrath. So what should government do?

The first thing is to remove some of the huge barriers to investment and employment in existing Federal laws. Writing in his blog, Mickey Kaus, hardly a Rush Limbaugh conservative, points to the Davis-Bacon Act, which requires workers hired on Federally-funded contracts to be paid the “prevailing wage” in the relevant county as determined by the Federal government. One of the centerpieces of the stimulus package was funding for “weatherization” of homes, but since it was launched the program has weatherized only 22,000 houses, largely because the Feds spent most of 2009 trying to establish the prevailing wage for weatherization work in more than 3,000 U.S. counties.

Davis-Bacon has been around since the 1930s, and was introduced to “stabilize” the construction industry by protecting white northern workers from being undercut by cheaper black migrants from the South. The Obama Administration is now presiding over a big expansion in the scope of Davis-Bacon to many additional jobs not previously covered. Moreover, the “prevailing wage” is set not in reference to actual wages as reported by the Labor Department’s Bureau of Labor Statistics but by its Wages and Hours Division, which uses a formula based on what the prevailing wage would be if all applicable jobs were unionized. According to some studies, this adds 22 percent to the actual prevailing wage. Kaus reports that the city of Portsmouth, New Hampshire turned down stimulus package money for construction of a new water treatment plant because the application of Davis-Bacon would have added $2.3 million to its $17.3 million cost. Ideally, Davis-Bacon would be repealed entirely, but with a President and a Democratic majority in both houses of Congress, who depend on labor union support, the likelihood of this happening is nil.

There are plenty of other examples of wrong-headed policies, including one of the highest corporate tax rates in the world, which is so riddled with special tax breaks and loopholes as to make a mockery of any claim to transparency and fairness. Many countries have found that a lower tax rate combined with elimination of most special exemptions generates more revenue with fewer distortions. Another example is the Obama Administration’s determination to impose taxes on overseas operations of U.S. corporations even before profits are remitted, which no other country does. Unfortunately, in the current political environment and under the current administration, neither of these anti-competitive policies stands any real chance of reform.

Finally, there is the “vision thing.” Barack Obama came to power promising a new approach to policy and politics, but in almost everything he has done he has proven himself a thoroughly conventional politician. His approach to technological change and its effect on the composition of industry is to award grants to companies trying to develop batteries for electric cars, while at the same time he has spent over a hundred billion dollars of taxpayers’ money to preserve jobs, wages, and benefits at GM and Chrysler. In an industry that has to cut its production capacity by at least a third just to survive, this makes no sense at all.

What we need instead is a set of policies that can help workers dislocated by technological transformation, globalization, and other fundamental changes to adapt to the requirements of the new economy. Rather than spend huge sums on vain efforts to preserve jobs destined to vanish, some fraction of that money could be spent on helping workers find new jobs and acquire the skills needed to succeed in them. Instead of trying, as the U.S. and some European countries do, to use incentives and penalties to prevent companies from shedding jobs, we should instead focus on the redundant workers themselves, as most Scandinavian countries and the Netherlands do. In Denmark, when two large meat packing plants closed with a loss of over 1,500 jobs, the national “workbusters” program shifted into gear, providing about €400,000 in assistance to complement financial contributions by the former employer, to detect vacant jobs and new job opportunities and to promote the laid-off workers to potential new employers. The company, with government assistance, published a leaflet, which it sent to 500 companies in the region, outlining the skills and ambitions of the former employees and providing information on the program and other employers’ experiences with it. Within 10 months, 98 percent of them had found new jobs, at a cost of around $350 per person.

When the Swedish energy company Vattenfall retrenched some 450 workers the company, with government support, set up an internal support organization to which each of the employees was reassigned to “work” full-time on finding new employment. Each person was assessed and assigned a tutor to develop a plan for training for a new trade or for self-employment or to pursue additional education. The company published a job journal on the company’s intranet to help workers find new jobs within the company, while all new internal recruitment requests had to go through the redundancy pool to identify a possible match. The program also topped up the salaries, at least temporarily, of those workers who accepted lower-paid jobs within or outside the company. The cost? About $20 million, or $50,000 per worker. A lot of money to be sure, but much less than the $400,000 in the Obama stimulus package.

These are not panaceas, and may not be applicable in all cases. But they are indicative of a flexible and innovative approach to unemployment that takes into account structural changes in the national and global economy and seeks sustainable solutions instead of quick fixes. Some may argue that the American system of government makes this kind of approach exceptionally hard, but even now President Obama may still have enough political capital to get something done. If he took on Davis-Bacon he would achieve the kind of bipartisanship he claims to want. But that would take extraordinary political courage and leadership of a kind the President so far has not exhibited.

What does this mean for investors? It does not mean that industries like steel and cars and textiles are in terminal decline or that investors should shun them. Some companies will still make money supplying clothes and cars to a growing global population of consumers. It just means that GM, Chrysler, and others may not be among them. More disturbingly, since it is a long time since what was good for General Motors was good for America, countries that fail to recognize and respond appropriately to these fundamental techno-economic shifts will fall behind those that do. In the U.S., this means that if we keep on the present course, over the long term our productivity will stagnate, causing domestic prosperity to decline. It has happened before. Argentina a hundred years ago was one of the richest countries in the world. It would be wise to consider these trends as we look at new investment opportunities at home and abroad.

The March 4, 2010 issue of The Wall Street Journal had an article written by Emily Maltby titled A Plea for Direct Lending to Companies.  In the piece, Ms. Maltby discusses the pros and cons of the SBA passing over the banks and becoming a direct lender to small businesses itself.  Clearly there are pros and cons but the general conclusion is that the SBA does not have the infrastructure in terms of systems, trained lenders, etc. to become a direct lender and in any case, does not want to compete with the very banks that have joined the SBA’s programs.  President Obama even suggested that “creating a direct lending system would make a massive bureaucracy.”

So, what is the problem here?  If the SBA is willing to provide as much as a 90% guarantee, shouldn’t the banks be eager to lend when their ultimate source of repayment is Uncle Sam?

Karen Mills, the Administrator of the SBA suggests that perhaps the problem is not entirely the fault of the banks.  Indeed, she suggests that in many instances, the problem lies with the small businesses being unable to provide a satisfactory loan package to the bank that it can understand and lend against.  She is quoted in the article as saying, “we can get them bankable by helping them with their package.”  Says Ms. Maltby, Mills is “referring to the owners’ business plans and other necessary application materials required by lenders.”

It’s at this point that I sat up and said, “Hey, that’s what we do at Cayenne.”  We have the staff, the expertise and the experience to help small business owners prepare to go to an SBA participating bank with a complete, well documented loan package.  In fact, we already do it all the time.

Note to small business owners: You don’t have to do this by yourself.  There are plenty of resources right here at Cayenne that you can use to get your loan package prepared and prepared right the first time.

I know some really smart people who refuse to get on LinkedIn, Facebook, and Twitter. Sometimes, they cite paranoid-sounding privacy concerns. Other times, they say “social media is a passing fad,” or that social media somehow isn’t relevant to them, or that social media is a waste of time. I don’t think they realize that, almost overnight, social media has become as mainstream as cell phones and horseless carriages. These Luddites need to open their eyes and take stock of the new tools at their disposal. Maybe this video will open some eyes.

Do economic cycles of boom and bust affect the number of start-ups? Most analysts have linked entrepreneurial activity to economic growth as though it was a given … and conversely, believed that when recession struck, start-up activity slowed substantially. A recent study by the Ewing Marion Kaufman Foundation concludes that both theories are pure bunk. And as though that bombshell was not enough, the Kaufman study goes on to explode several other theories about what factors stimulate new business formation.

Do start-ups increase in proportion to the availability of venture capital? Nope. Kaufman Foundation researchers Dane Stanler and Paul Kedrosky dispel that myth as well. The authors note that the doubling of start-ups from the period 1960-1978 to the decades since may indeed have been due to the advent of the personal computer and the expansion of the venture capital sector. (One wonders if the baby-boomers coming of age may not have contributed to this step-change as well.) However, the constancy of recent start-up data belies the influence of venture funding. Start-up activity fluctuated by only 3% to 6% each year between 1977 and 2005; but the data shows that venture investment varied by as much as 500% during the same period.

Do tax or bankruptcy law changes, technological advances or entrepreneurship education affect the number of new ventures? No again! The report, Exploring Firm Formation: Why is the Number of New Firms Constant?, also finds no correlation between start-up activity and tax policy or any of these other factors; so much for the theories of our most vocal politicians. Instead it documents the same steady half-million start-ups per year, give or take a 3 to 6 percent. The authors discuss a few possible explanations for the unexpected constancy, some rather arcane, but they do not seem to buy into any of them.

Common sense suggests that certain of the factors discussed in the Kaufman report must have at least some influence on the number of start-ups, even if they do not affect substantially the total for a given year. For example, limited amounts of available venture investment must surely delay some particular start-up decisions. I have been involved in a few such decisions. Similarly, high interest rates and tight credit must also have an effect on many decisions, especially those involving sole proprietorships and mom-and-pop operations. So perhaps a study with greater granularity would reveal that while the total number remains relatively constant, the mix of start-up types changes, maybe even substantially. Perhaps in recessions when venture funding declines, a fall in interest rates turns entrepreneurs toward credit sources. It could also be that more innovation-based entrepreneurs test their business innovations when the economy is booming, and that more laid-off workers start enterprises when unemployment is high during recessions. I suspect that the “mix” of different kinds of start-ups changes a great deal even though the total number may not change much.

The Stangler and Kedrosky study does not encompass the current Great Recession, of course, it is too soon. Yet surely this anomalous economic epoch will surely add some telling figures. The investment portfolios of the wealthy individuals and institutions that comprise the limited partners of venture firms declined substantially since 2007 and venture investment has fallen by 40% or so since then. At the same time, credit tightened historically and unemployment soared into double figures. Will start-up totals for this period continue the constancy that Kaufman reports? And if not, how will it vary? Will the limitations on available capital drive start-up numbers down, or will necessity and cheap assets power them up? Or will past constancy persist despite alterations in the mix? Only a study based on more granular data could reveal that. I doubt that such data is available or could be economically derived, though that information could prove useful to an economy so reliant on small businesses to create jobs.

The MoneyTree report of U.S. venture capital activity for the third quarter was just released by PriceWaterhouseCoopers and the National Venture Capital Association.

The $4.8 billion invested in Q3 is a significant jump from the $4.1 billion in Q2 and $3.3 billion in Q1, but still well off of the $7.1 billion invested during Q3 of last year. The number of deals has remained in the 600 to 700 range each quarter this year, compared to 900 to 1,100 per quarter last year. Clean Tech experienced an 89% increase in Q3 over Q2. As in previous quarters, the four strongest sectors remained biotechnology, industrial/energy (including green tech), software, and medical devices. Very little money – only $633 million – flowed to companies raising venture capital for the first time, down from over $1.5 billion during Q3 of last year.

Meanwhile, several weeks ago, the Center for Venture Research released their analysis of the angel investor market for the first half of 2009. The CVR reported that 24,500 ventures raised capital during this period from 140,200 individual investors. Although the dollars raised fell relative to the first half of 2008, the total number of investments increased slightly.

Combining this data with anecdotal evidence from elsewhere, it’s clear that great opportunities are still finding investors. It’s obviously harder to raise capital than it was before, but I think we all knew that. The keys to funding success haven’t changed much: create a great opportunity with a lot of growth potential, develop as much traction as possible before trying to raise capital, and package the venture in the most compelling way you can when you take it to the investor community. We can help you with that last part.

Eco-conscious product suppliers and their prospective customers descended en masse this week on Phoenix for the annual Greenbuild convention. It is quite an event with over 1,800 exhibitors, several full days of educational conferences, and headline ‘bring on the crowd’ brand names offering inspiration and entertainment. To wit, last night’s marquee event was held at Chase Field, home of the Arizona Diamondbacks and included a speech from Al Gore, and a concert by Sheryl Crow!

Beyond the headliners I was really impressed with the level of entrepreneurship on display at Greenbuild. I think a good way to measure entrepreneurship in a sector is by the amount of small sized booths at an event. Entrepreneurs typically can’t pay much, so they buy the smallest space available and go pitch their tent. The bottom line … lots of small booths at Greenbuild.

Among the areas where it seems Entrepreneurs are diving into the green space are:

1. Green Roofs, which are essentially a container of live plants and a drainage system that can be snapped together on a rooftop. Once installed, the systems dramatically reduce the heat absorption of the rooftop and thus reduce energy costs. There were at least 20 companies present at the show from various regions of the country marketing differentiated products and business models in this category.
2. Energy Efficiency Analysis and Improvement Service Providers offer a relatively low-cost capital efficient way for entrepreneurs to enter the green space. Residential and commercial energy efficiency plans employ a myriad of techniques from lighting and HVAC system improvement to insulation and window improvement to reduce energy expense in a structure. Given the multiple tools available, it’s not surprising that entrepreneurs have rushed to develop services and business models to help building owner get the most energy efficiency improvement per dollar spent … and prove the savings through software and reporting tools.
3. Geothermal Heat Pumps rely on temperature differential between ground and below ground levels. Certainly more capital intense than the first two items, this category represents an area where entrepreneurs with a mechanical focus are probing.

I believe next year’s show will be in Chicago, and if it’s anything like this year’s, it won’t be one to miss.

Entrepreneurship. It conjures images of twenty-something graduate students hacking code in a Silicon Valley dorm room, fueled by a steady supply of Red Bull and Ramen. Starting a tech company requires youthful vigor, endurance, freedom from obligations like mortgages, imagination, and an intimate understanding of what’s trendy and hip. Right?

To be sure, a number of tech titans started more-or-less this way: Facebook, Google, Microsoft, Yahoo, and Hewlett-Packard, to name a few.

However, a new study published last week by the Ewing Marion Kauffman Foundation – the group devoted to fostering entrepreneurship around the world – suggests that the age distribution among company founders is much broader than we might have imagined.

The study offers several findings:

• Technology company founders born in the U.S. had an average age of 39 when they started their companies.
• Among a sample of companies started in 2004, two-thirds of founders were in the 35-54 age bracket.
• The 55-64 age bracket exhibited the highest rate of entrepreneurial activity from 1996 to 2007, while the 20-34 bracket actually had the lowest rate.

However, these findings don’t come as much of a surprise to us here at Cayenne Consulting. We’ve spoken with thousands of entrepreneurs, and although we don’t ask people their ages, we do witness the experience they bring to a new venture. Those who succeed at generating interest from investors tend to have decades of business and technical experience.

The study’s author argues that the shifting age distribution in the U.S., coupled with a continued decline in job security, will put more middle-aged people in this entrepreneurial sweet-spot. As a result, “we may be about to enter a highly entrepreneurial period.” I hope she is right, because entrepreneurship will clearly play an important role in our return to economic prosperity.

But perhaps the most encouraging insight for those who’ve ever thought “I’m too old to start a company” is simply this: No, you’re not!

The Center for Venture Research has published their 2008 report of angel investor activity in the U.S. The report contains both good news and bad news.

• The Good News:  The number of active angel investors in 2008 and the number of deals they invested in remained comparable to 2007. In 2008, a total of 55,480 ventures received angel investment, down only 2.9% from the previous year. The number of active individual angel investors remained steady at 260,500.

• The Bad News:  The total dollars invested in 2008 fell 26.2% to $19.2 billion. This indicates a contraction in average deal size, presumably due to lower valuations.

The six sectors receiving the most angel investment are as follows:

• Healthcare: 16%
• Software: 13%
• Retail: 12%
• Biotech: 11%
• Industrial/Energy: 8%
• Media: 7%

In 2008, 45% of angel investments occurred at the seed or start-up stage. Only 10% of the deals brought to the attention of angel investors succeeded in obtaining an investment.

Note that the study only includes accredited or “sophisticated” angel investors who invest through angel investing groups; the study excludes investment activity by informal “friends and family” investors.

In the current economic storm, it’s easy to lose sight of the bigger picture.  Even the biggest storm will eventually pass.  We will emerge from our shelters, pick up the pieces, rebuild, and move on.

When this storm blows over, all of the world’s problems — and attendant opportunities — will still be there.  Except this time, the landscape will look a little different.

On January 20, 2009, a new administration took office.  In his inaugural address, Obama expressed strong support for entrepreneurs, saying:

“…it has been the risk-takers, the doers, the makers of things – some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.”

The incoming administration is a strong proponent of innovation in science, technology, healthcare, and the environment.  On the agenda: a long-term plan for U.S. leadership in five critical areas, supported by heavy investment.

Here’s what the administration has to say on whitehouse.gov:

21st-century technology and telecommunications have flattened communications and labor markets and have contributed to a period of unprecedented innovation, making us more productive, connected global citizens. By maximizing the power of technology, we can strengthen the quality and affordability of our health care, advance climate-friendly energy development and deployment, improve education throughout the country, and ensure that America remains the world’s leader in technology. Barack Obama and Joe Biden will:

• Lower Health Care Costs by Investing in Electronic Information Technology Systems: Use health information technology to lower the cost of health care. Invest $10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records.
• Invest in Climate-Friendly Energy Development and Deployment: Invest $150 billion over the next ten years to enable American engineers, scientists and entrepreneurs to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in hybrids, promote development of commercial-scale renewable energy, and begin the transition to a new digital electricity grid. This investment will transform the economy and create 5 million new jobs.
• Modernize Public Safety Networks: Spur the development and deployment of new technologies to promote interoperability, broadband access, and more effective communications among first responders and emergency response systems.
• Advance the Biomedical Research Field: Support investments in biomedical research, as well as medical education and training in health-related fields. Fund biomedical research, and make it more efficient by improving coordination both within government and across government/private/non-profit partnerships.
• Advance Stem Cell Research: Support increased stem cell research. Allow greater federal government funding on a wider array of stem cell lines.

The proposed $800+ billion stimulus package goes several steps further.  In his first weekly video address, President Obama stated:

“This is not just a short-term program to boost employment. It’s one that will invest in our most important priorities like energy and education, health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.”

The stimulus bill also includes hundreds of millions for SBA loan guarantees and direct lending to entrepreneurs.  Furthermore, the administration proposes added funding to incubate new ventures. The National Business Incubator Association says:

In today’s economic climate, there’s a new focus at both the state and national level on entrepreneurship and entrepreneur support. In the U.S., there’s talk at the federal level about increased support for and possible development of new business incubation programs to help those who have lost employment. A portion of President-elect Obama’s Small Business Emergency Rescue Plan is focused specifically on “creating a national network of public-private business incubators” and states that his administration “will invest $250 million per year to increase the number and size of incubators in disadvantaged communities throughout the country.”

Entrepreneurs working to solve fundamental problems in fields such as healthcare, green energy, education, and telecommunications will see unprecedented financial support and opportunities for bringing their innovations to market.  The biggest winners will be those who start now, while others wait for the recession to pass.

These are turbulent times, to be sure, but just over the horizon is a sea of opportunity awaiting those who stick it out.