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McNair Center Weekly Roundup

Entrepreneurship Weekly Roundup: 11/11/2016

Weekly Roundup is a McNair Center series compiling and summarizing the week’s most important Innovation and Entrepreneurship news.

Here is what you need to know about entrepreneurship this week:


Small Businesses Can Expect Policy Changes Under Trump

The Associated Press

Entrepreneurs might expect policy shifts under a Trump presidency. Trump has released his plan for his first 100 days in office. However, much uncertainty over his policies and objectives remains. The battle over health care and immigration reform, taxes, regulation, the federal minimum wage, trade deals and federal contracts will be fought in a Republican-led congress that has not always agreed with the President-elect’s proposals.

David Levin, CEO of the American Sustainable Business Council, expressed the concern of many small business owners in the US: “What we don’t know is whether or not there is a sincere interest in supporting small and medium-size enterprises in this country — rebuilding Main Street, rebuilding manufacturing.”


With Election Over, Small Firms Look to Hire, Invest

Ruth Simon, Author, Wall Street Journal

With the uncertainty of the election partly resolved, some small business owners have said that they are ready to begin investing and hiring. According to a recent Vistage Worldwide poll of 380 small business owners, 49 percent of respondents said that the election of the outcome had improved their outlook for the economy. Nearly 20 percent stated that the election results encouraged them to increase their hiring or capital investment. Many point to the prospect of lower taxes and healthcare costs as sources for their optimism.

Not all business owners surveyed viewed the election’s outcome positively. 35 percent responded that their outlook for the economy had worsened. Roughly 20 percent planned on decreasing hiring and investment. Many are wary of Trump’s tough position on immigration, which could make the search for high-skilled workers more costly.


Black-Owned Businesses Face Credit Gap

Ruth Simon and Paul Overberg, Authors, The Wall Street Journal

According to data from the U.S. Census Bureau’s 2014 Survey of Entrepreneurs, black entrepreneurs are less likely to ask for capital when they need it. When they do ask, black entrepreneurs are not as likely to receive the full amount that they requested.

Black entrepreneurs in 2014 were three times more likely than white entrepreneurs to say that they were in need of additional financing but opted not to apply for it. Compared with 74 percent of white entrepreneurs, only 46 percent of black entrepreneurs received the full amount of funding that they had requested.

Simon cites challenges in access to capital and funding as obstacles for black entrepreneurs who are trying to grow their businesses. According to Alicia Robb, a senior fellow from the Ewing Marion Kauffman Foundation, “Across the board, blacks have higher denial rates, even after controlling for credit and wealth.”


How Lucrative Startups Can Avoid Disruption as They Grow

Jason Albanese, Contributor, Inc.

Jason Albanese, CEO and founder of Centric Digital, offers advice to startups looking to be the next Google or Facebook by redefining their industry. Revolutionary startups are often some of the most lucrative and successful in their field.

Market-shaking startups frequently fail to maximize their potential because market and operational disruptions often go hand in hand. Disruptive startups need to take time to grow at their own pace. Entrepreneurs cannot afford to rush the incubation period.

Most market ecosystems eventually find a new equilibrium; Airbnb and Uber recently experienced this within their industries. Albanese recommends that market-shifters foster and embrace change within company culture. Adaptivity, creativity and agility are instrumental in introducing and surviving a market disruption.


6 Strategic Business Practices For Freelance Entrepreneurs

Sam Cohen, Contributor, Huffington Post

The life of a freelance entrepreneur is uncertain and irregular. For example, daily operations lack the typical structure and comfort level that most industry jobs offer. On the other hand, self-employed entrepreneurs get to set their own work schedules and define the rules and best practices for their companies.

Despite the obvious discrepancy between freelance entrepreneurship and corporate culture, Sam Cohen recommends that entrepreneurs borrow business practices, such as building up cash reserves and establishing a performance review process, from bigger industry players.

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McNair Center Weekly Roundup

Entrepreneurship Weekly Roundup: 10/28/2016

 Weekly Roundup is a McNair Center series compiling and summarizing the week’s most important Innovation and Entrepreneurship news.

Here is what you need to know about entrepreneurship this week:

Big Problems for Small Practices

Catherine Kirby, Research Assistant, McNair Center for Entrepreneurship and Innovation

Kirby examines the effects of the Affordable Care Act on entrepreneurship within health care. U.S. health care regulations currently hinder entrepreneurship among healthcare professionals, particularly for doctors seeking to establish private practices.
Kirby recommends that the U.S. implement policy changes that would better foster entrepreneurship among physicians. Measures like restructuring reimbursement rates and improving quality of care requirements would reduce the burdens that many private practices face and enable physicians to start small medical practices.


U.S. early stage investment holds up, late stage plunges

Joanna Glasner and Gené Teare, Contributors, CrunchBase

Venture capital investment slowed in the third quarter. Glasner and Teare write that estimates relying on end-of-quarter data may overstate declines in early stage investment.
Crunchbase compares its own projected funding totals with reported round count totals for the third quarter. Quarterly projected funds show bullish early stage investment. When factoring in projections, Crunchbase’s report for the third quarter finds that U.S. startups continue to enjoy high levels of strategic, seed and venture capital investment during seed and early stage rounds. However, there is a steep decline in late stage investment, with fewer companies raising late stage rounds and investors pouring less money into Series C and later rounds.


Startups get bought not sold

Ken Elefant, managing director at Intel Capital, PE Hub

Many entrepreneurs focus, sometimes shortsightedly, on the dream of reaching an IPO. As a result, start-ups often fail to develop important relationships with corporate investors. According to data from Dealogic, only five U.S.-based tech companies went public in the first eight months of 2016. To avoid going out of business or selling at a fire-sale price, Elefant recommends that entrepreneurs develop strong relationships with corporate investors early on so that a later search for an acquisition offer does not turn into a last-ditch attempt to save a sinking ship.
Corporate investors invest in companies for three reasons: to gain access to a technology, to break into other markets and to acquire. For start-ups, relationships with corporate investors offer viability and credibility. Additionally, these relationships provide development, support,  feedback and access to corporate engagement and funds. For companies that might not be on track for an IPO, strong relationships with corporate investors can lay the groundwork for an acquisition.


‘Shark Tank for Students’ Re-Defines Entrepreneurship

Christopher Putvinski, SAPVoice, Forbes

Putvinski focuses on a new television series, The Social Innovation Series. This “Shark Tank or a Y Combinator for students” asks aspiring entrepreneurs to address problems in health or wellness in their own communities.
The show grants $1,000 to students with promising and innovative ideas and a grand prize of $10,000 and the title of “SAP Teen Innovator” to the student with the winning idea.


How Blind Hiring Can Make Your Company More Inclusive

Frida Polli, Mattermark


In an editorial for Mattermark, Polli writes on how diverse companies outperform their non-diverse counterparts. Increasing diversity among employees not only promotes a more fair and equitable workplace environment but also offers a high return on investment for companies. See the McKinsey & Company Report on how diversity improves company performance. Polli suggests that “blind auditioning” is a possible solution for the lack of diversity in companies’ workforces. Using advanced analytics and assessment technologies, companies can ensure predictability and eliminate bias in their pre-hiring assessments of applicants. According to Polli, “improving diversity isn’t just the right thing to do, it’s the smart thing to do.”


And in startup news…

Google buys eye-tracking VR firm Eyelock

Grant Gross, Senior Editor for IDG News Service

Eyefluence is a California-based startup focused on eye-interaction technologies in Virtual Reality (VR) and Augmented Reality (AR) headsets. Serial entrepreneurs Jim Marggraff and David Stiehr founded Eyefluence in 2013.
Google acquired the startup on Tuesday. The acquisition reflects Google’s growing interest in VR and AR technology. The deal further shows the growing potential of VR and AR for entrepreneurs interested in building successful tech startups.


Wavefront gathers $52 mil Series B

Iris Dorbian, Author, PE Hub

Another California-based tech-based startup, Wavefront, recently reported raising $52 billion in Series B funding. Investors include big names such as Sequoia Capital, Sutter Hill Ventures and Tenaya Capital.
Wavefront develops metrics monitoring services for cloud and modern application environments. Wavefront offers invaluable services to leaders in the software industry that rely on Cloud technology, such as Workday, Box, Lyft, Microsoft, Intuit and Groupon.