2.5 Million Reasons It's Good to Run a Business Incubator
In a speech at Twitter's San Francisco headquarters Monday, the new head of the U.S. Small Business Administration announced the launch of a competition for new and existing startup accelerators, with total prize money of $2.5 million. Yes: the SBA is looking to accelerate business accelerators.
Maria Contreras-Sweet, who has been at the helm of the SBA for just 30 days, said the competition's goal is to foster "those who help seed organizations, helping startups go from zero to 60." The agency will award 50 prizes of $50,000 to incubators and accelerators around the country.
"We want to export the Silicon Valley model," Contreras-Sweet said, nodding to the need to spur innovation in regions outside of the San Francisco Bay Area and the Northeast. The goal is to spread access-to-capital away from the coasts, where traditional sources of startup funding are largely based.
Contreras-Sweet gave few details about what types of ventures qualify for the competition, for which applications will be accepted until August 2. She jokingly defined "accelerator" only in the negative, by calling out the South Bay home of the fictional company Pied Piper in the HBO show Silicon Valley. "You know that house on Silicon Valley?" she said. "Well, that's not a growth accelerator."
The competition will be judged based on each accelerator's stated mission, business goals, and other criteria. In addition to geographic diversity, the SBA is going to be looking for incubators and accelerators that are founded by or trying to support women and other underrepresented groups.
Earlier in her speech, Contreras-Sweet said she agrees with President Obama's recent creation of 18 tax breaks targeted at small business, but noted there's more the government should do to protect tax credits for small and midsized businesses, and to provide incentives for paying their workers higher wages.
"You can't have a conversation about creating jobs or economic growth without talking about the lifeblood of our economy: our entrepreneurs," she said.
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.