Our government has authorized $800 billion in stimulus funds to be spent on roads, bridges, sewers, etc. The theory, is that this will create jobs. It will. But the jobs will be short term for the most part. What if there was a way to create a lot more jobs, create entirely new industries, regain leadership in key technology sectors, and provide long term giving to charities? And by the way, do it for say…$2 billion not 800. Here’s the plan.
Take $2 billion. Parcel it out to would be startup companies / entrepreneurs, in $100k chunks. Don’t loan it. Don’t take equity. Give it.
Require the entrepreneur to match the 100k, for a total of 200k to prove out the business concept. Friends, relatives, angel investors, would be the source of the matching funds. If the entrepreneur can’t find matching funds, its a good bet the idea doesn’t have merit. We’re using the free market to vet these ideas. Not a government bureaucracy.
Now let’s do some math. We just funded 20,000 new startups. Yes, 20,000 new businesses. True, many of these will end up being roadkill on the startup highway. But many will survive. Some will flourish. and a few, just a few, will go BIG. Google big. Microsoft big. Subway sandwich big.
Let’s say, that out of a 20,000 new companies we get just one Google. The value of Google, as of this writing, is close to $200 billion dollars. We just made a 100x return on our investment! But wait there’s more:
* we created ton of jobs.
* we created some new industries that spawned other companies. A multiplier effect if you will.
* we provided an incentive for private capital to invest in startups.
* we didn’t expand the size of government.
* charitable giving goes through the roof. We know this. Successful entrepreneurs give back.
What are we waiting for?