How you can help create 10,400 new jobs in Washington State by 2020

I am for economic growth. Now, this shouldn’t be an earth-shattering surprise to you, few people are against growth. However, you might encounter people who are for economic growth, but against immigration. Here is why that is a juxtaposition.

In many ways, immigration equals economic growth. Don’t take my word for it, look at the facts:

• 40% of fortune 500 companies were founded by immigrants or their children (source).
• Immigrants start ¼ of technology and engineering companies in the U.S even though they only represent ⅛ of the population (source).
• In 2012, immigrant-founded engineering and technology companies employed 560,000 workers and generated $63 billion in sales nationwide (source)

These are impressive numbers. To top it up, here are three concrete examples of successful immigrants:

• Jan Koum, born in Ukraine, and co-founder of Whatsapp, which was recently sold to Facebook for $19 billion.
• Jerry Yang, co-founder of Yahoo and born in Taiwan. Yahoo’s market cap: $37 billion
• Sergey Brin, co-founder of Google and born in Russia. Google’s market cap: $379 billion.

This country is built on immigration, our history and our heritage has created a culture and a narrative that is unparalleled by any other nation. The U.S. is where smart people from other nations come to prove themselves, and this brings economic growth for everyone. But, we don’t just need talented immigrants to start companies, we also need them to meet the huge demand from already established American companies.  

More than one-fourth of science and engineering firms already report difficulty hiring, and this is only going to get worse. Over the last 10 years, jobs in STEM have grown three times as fast as jobs in the rest of the economy, but the number of Americans studying STEM is growing by less than 1% per year (Source: ESA & McKinsey). The U.S. is facing a projected shortfall of more than 200,000 advanced-degree STEM jobs by 2018 (Source)

As a country, we can’t compete on salaries levels, but we can compete in terms of knowledge and innovation. Unfortunately, the current immigration laws are inhibiting our competitiveness. The latest round of applications for H-1B visas for high-skilled workers exceeded the annual limit within a week. 172,500 H-1B petitions were filed for 85,000 visas, the highest number ever recorded for H-1B demand (Source). Keep in mind, these are company-sponsored visas and thus a reflection of a real demand.  

FWD.us and The Partnership for a New American Economy (PNAE) are working on convincing Congress to accelerate an immigration reform and keeping America’s tech sector competitive. As part of this effort, FWD.us and PNAE are organizing 12 events all over the country during the last two weeks of April. Techstars Seattle is hosting one of these events.

Join us, and local entrepreneurs, investors, and leaders for a conversation on why immigration reform is critical to the tech and start-up communities in Seattle. The event takes place on Tuesday April 22 from 6pm - 8pm at 511 Boren Ave N, Seattle.  See who is on the panel and register here: http://pnae.us/icodesea

If you can’t attend, help us spread the word on Twitter (click to tweet), and if you are an entrepreneur or an investor, sign the letters urging Congress to advance immigration reform.

• Entrepreneurs’ letter: http://pnae.us/eletter
• Investors’ letters: http://pnae.us/iletter

If we succeed, an expansion of the high-skilled visa program would create an estimated 10,400 new jobs in Washington by 2020.

- Andy

The story behind RevenueLoan...and why I'm excited about the company

I started RevenueLoan because I am on a mission. I have a passion for entrepreneurship. I've been starting and running technology companies for 15 years now.  I love entrepreneurs and generally find myself spending all my time trying to help them with all aspects of their business. 

Why do I do this? Well, two reasons. First, I received lots of help as a young entrepreneur. I wouldn't have been nearly as successful had it not been for the help and mentorship of lots of kind friendly people. Second, I believe MANY people aspire to be entrepreneurs and to build something that they and their employees believe in and can be proud of. To accomplish this goal, financing is a often a core impediment to realizing small business success and growth. 

Two and half years ago My partner Chris DeVore and I started Founder's Co-op because we thought that the traditional venture capital model was broken.  We thought success for a startup company was better facilitated by a super angel entity than by a traditional vc fund. We continue to believe this....and are in the process of proving it! I want to be clear -- this does NOT mean that I think venture capitalists suck or are useless. On the contrary, venture capitalists play a vital role in the startup process. 

During the first year of operating Founder's Co-op, we perceived another opportunity to support a group of underserved entrepreneurs. These entrepreneurs had small businesses and big visions and were impeded because they didn't fit traditional bank debt or traditional venture capital or angel equity models. This market insight-- which was  facilitated by Erik Benson and the partners at Voyager Capital -led to the creation of RevenueLoan, the company. We did the first two RevenueLoan investments under the Founder's Co-op umbrella (or flag) before determining that the opportunity required a separate investment vehicle. One of those deals has already proven to be very successful for the entrepreneur and for us!  

Founder's Co-op is on a mission to innovate in the area of financing of early stage technology companies. RevenueLoan is a vital innovation.  The reason I'm so excited about the company is because I think it's the best investment agreement I know of that truly aligns entrepreneur and investor incentives.  RevenueLoan puts an extra focus on increasing top line revenue growth which for any entrepreneur is a critical success metric!

In conclusion -- and just to put a fine point on it -- I'm excited about RevenueLoan because I think it is going to help a large number of entrepreneurs grow their businesses.  

What's the impact of the 2009 financial crisis on American culture?

I was recently asked this question by a reader of my blog -- and thought it was such a good question that I'd ask all of you.

My initial answer -- "I don't know" was accurate but insufficient.  I think that this past year is going to be perceived as having a significant impact on our culture. Below are some random thoughts on the question in the title of this post:

• The crisis was self inflicted and could not be externalized that easily. It's a little like a smoker who develops a bad cough.
• The crisis was not bad enough to cause real crisis in the streets -- or more specifically, the crisis wasn't so bad as to unite people in an emotion of grief, frustration, anger.
• The Madoff story gives both an externalized bad guy and a mechanism for uniting people emotionally. 
• People who were conservative with debt are the ones that worked through this period the easiest. 
• Our way out of the crisis includes the issuance of massive amounts of country debt -- the repayment of which remains a question.
• I like the idea of Pres. Obama and Gov. Schwarzenegger as the best bond salesman in the history of the world.

Aggressive steps for dealing with financial distress

I was speaking with a friend of mine this weekend. His situation is as follows:

• He runs a business that a year ago was doing 3MM in revenue with almost 500K in ebida. The business was growing 15+% per year.
• He bought a big commercial building for 4MM and has 2.5MM in debt on the building.

In the last six months:

• His business has been cut in half and ebida has been cut more than 50%.
• He hasn't been able to rent the commercial building and is using (more) debt to keep current on payments for the building
• Each month that goes by, he is risking bankruptcy (of one form or another).

My advice to him was as follows:

• Meet with 3 people whom you respect and present your business plan for dealing with your personal financial crisis
• After you get feedback, devise a plan and be aggressive in attempting to renegotiate debt with all lenders.
• Sitting back and waiting for solutions to appear is not a good strategy ....(Nor is waiting for a tenant to rent the space)

Sound familiar to anyone you know?

And coming to a theatre near you....the commercial mortgage crisis

This was taken from an article I read yesterday. Read the entire article here. 

The worst-case scenario goes something like this: With banks unwilling to refinance, a shopping center goes into foreclosure. Nobody can buy the mall because banks won't write mortgages as long as investors won't purchase them.

"Credit markets have seized up," corporate securities lawyer Michael Gambro said. "People are not willing to take risks. They're not buying anything."

That drives down investments already on the books. Insurance companies are seeing their stock prices fall on fears they are too invested in commercial mortgages.

"The system has never been tested for a deep recession," said Ken Rosen, a real estate hedge fund manager and University of California at Berkeley professor of real estate economics.

One hope was that the U.S. would use some of the $700 billion financial bailout to buy shaky investments from banks and insurance companies. That was the original plan. But Treasury Secretary Henry Paulson has issued a stunning turnabout, saying the U.S. no longer planned to buy troubled securities. For those watching the wave of commercial defaults about to crest, the announcement was poorly received.

Economic outlook

Mark Pincus has a great blog entry on the US economy here.  A portion of his post is posted below:

"I can't see how the dollar can't decline given that the fed is dropping rates to save the economy and counter tightening credit markets; meaning rates paid on dollar fixed income deposits will go down relative to other worldwide oppts. It seems that at some point the federal govt will have to start offering higher rates on t-bills as noone will be willing to buy its paper at low these rates.

So what happens when the fed is lending cheap and borrowing high? Seems like that spirals deficits even faster which btw contribute to obama's calls to raise taxes and 'pay our fair share'.

Where does this all go? Seems only outcome is higher taxes and interest rates along with record inflation as the dollar dives and real assets esp commodities skyrocket. Assuming that the rich give their money to hedge fund managers who are smart enough to bet on these trends, we end up with even greater concentration of wealth as a very small few avoid the economic landslide and increase wealth while the majority share a fairly equal misery."

The things I'm doing besides Founder's Co-op which I admit is not totally in synch with this economic outlook are:

1. International Real Estate
2. Google stock (yes, I bought a bunch at $415 -- feeling happy about that today
3. And I just bought SKF -- shorting the financial sector again. With all the people thinking we're out of the woods on the economy, I still don't think so. I bought it at a price of $99.