Victor Hwang gives speech at the Open Markets Institute

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What if everyone got a fair shot?
Vice President, Entrepreneurship Kauffman Foundation

What if everyone got a fair shot?

Everyone deserves a fair shot. That’s the promise of America.

Note: This is an excerpt of a presentation given at the the Open Markets Institute, where you'll find video of the sessions and full text of this speech.

A fair shot means that you should get a level playing field, no matter your skin color, your zip code, who your parents are, where you went to school, or how much money you started with in your pocket.

A fair shot means you can take an idea, work hard, and turn that idea into new wealth, new jobs, and new opportunity. That’s what entrepreneurs do.

Bias toward big

Over the last two years, since moving back to the Midwest, I’ve traveled to many of these places, and I’ve seen the contradiction firsthand. In Mr. Kauffman’s birth town of Garden City, Missouri – population 1,630 – citizens can’t even buy fresh produce. America may be glittering at the top, but it’s struggling at the bottom. We are a fair distance from a fair shot.

The inequalities are stark. Half of net new American businesses started in recent years were in just 5 of the biggest metro areas. When small businesses need capital, many reach out to banks. But large banks have become larger, and small and medium-sized banks, who are more likely to back new businesses in smaller markets, are disappearing. The smallest community banks have declined 41 percent since 2008. Today, only 18 percent of new businesses get a bank loan.

On the other end of the spectrum, high-growth tech businesses turn to venture capital. But only 0.6 percent of businesses ever raise venture capital – and it’s highly concentrated. Over 80 percent goes to 3 states. In past studies, less than 2 percent went to women; less than 1 percent went to underserved founders of color; and less than 1 percent went to rural areas.

This year, at the Kauffman Foundation, we’ve analyzed the barriers entrepreneurs face accessing capital, and we’ll publish a report later this fall. The bottom line: We’ve found that at least 81 percent of new businesses don’t access either venture capital or bank loans. That indicates they might not be accessing critical institutional capital they need to have a fair shot.

The challenge

The real debate is this: How do we build an economy that empowers the little guys and gals and gives them a fair shot?

Well, let’s think about who the ideal customer is. Who deserves our time, attention, and tax dollars? Do we focus on society’s biggest players or the littlest ones? Do we focus on existing companies who reduce jobs over time, or new companies who create jobs? Do we reward economies of scale that often become too big to fail, or empower those too small to succeed? Do we measure our economic well-being by the Dow Jones Industrial Average of the 30 largest companies, or by the broad-based dynamism of our entrepreneurial spirit?

In terms of making policy, can we reverse our lens?

What if?

To create a blueprint for bottom-up economic development, let’s ask some "what if" questions:

1. What if we focus on the little things that matter to millions of entrepreneurs, instead of the big things that matter to a handful of big players?

2. What if starting a business required zero forms and zero fees?

3. What if the energy that 238 cities expended on the Amazon HQ2 contest was invested instead into building their own entrepreneurs and innovators?

4. What if more workforce training dollars were dedicated to help people start and grow their own businesses, instead of just teaching employees to fill roles in existing businesses?

5. What if public school systems were redesigned to teach students how to make jobs, not just take jobs?

6. What if borrowing $30,000 to start or grow a new business was easier than borrowing $30 million to grow a big one even bigger?

7. What if antitrust laws were rewritten so that empowering entrepreneurial innovation was just as worthy a goal for our economy as lowering consumer prices?



What do you think?

Rather than leave it with those questions, we’d like you to respond. In the form below, give us your information, plus a short synopsis of what you think the impact of addressing these questions would be. We’ll follow up with those of you who’ve submitted the most intriguing ideas, to work with you on an expanded version, to be posted here on Currents in the future.


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