Startup News Digest 10/23/2015

Our weekly take on some of the biggest stories in startup and tech policy.

Judicial Redress Act Heads to Senate. On Tuesday, the House passed the Judicial Redress Act, which would extend rights to judicial redress to citizens of the EU and other designated countries. The bill has broad support within the tech community, where it is seen as both a sensible next step in surveillance reform and essential to advancing an updated safe harbor agreement between the U.S. and the EU. The bill was slated for Senate consideration as an amendment to the Cyber Information Sharing Act (CISA), but was pulled on Thursday for procedural reasons. The bill’s sponsors are working with Senate leadership to schedule a vote and we will continue to track. Meanwhile, the White House chose to endorse CISA, but also criticized it for allowing companies to share data with any agency, rather than having a centralized clearinghouse.

A National Drone Registry: Recreational drone users will soon be required to register their unmanned aircrafts, federal agencies announced this week. The decision comes amidst national airspace safety concerns from the Federal Aviation Administration and the Transportation Security Administration as reports from piloted aircrafts of drone sightings of or close calls with rogue drones have mounted in the past year. The details of the registration system are still being worked out and the FAA is currently seeking input from the public. Hobbyists and drone users can submit their comments here until November 20.

Bitcoin Teams up with the Feds. A new technology-government alliance is bringing together Bitcoin experts and advocates with government officials. The Block Chain Alliance was established to help federal authorities better understand the complexities of bitcoin transactions, and to change the perception of bitcoin as a "currency for criminals". The alliance will also offer digital currency companies an opportunity to demonstrate power and potential of these new technologies, especially for law enforcement agencies. The Justice Department and Secret Service and are already exploring how to use Bitcoin to more securely track the flow of digital currency across borders.

‘Dig Once’ Bill Introduced in House. On Thursday, Reps. Walden and Eshoo introduced the Broadband Conduit Deployment Act of 2015, which would mandate installing broadband conduit pipes during federal road construction. This would allow service providers to easily install fiber lines years down the road without having to excavate the road to re-dig a channel. The Federal Highway Administration has reported that ‘dig once’ policies like these can reduce broadband deployment costs by as much as 90%.

Code.org letter on CS education. Code.org and several major tech industry players sent a letter to the legislators leading education reform efforts this week. The letter urges lawmakers to include provisions that promote computer science education in any revision of the Elementary and Secondary Education Act (ESEA). Among their requests: maintain computer science as a “core academic subject” and retain resources that would improve teaching and learning in STEM subjects. You can read the full letter here.

Coding Behind Bars. This week Vice reported on the first and only coding bootcamp behind bars. Non-profit The Last Mile, runs Code.3730, a six-month coding course for inmates at San Quentin prison. The curriculum - Java Script, HTML, CSS, and Python - is similar to other code academies, but it’s taught on on dry-erase boards, without Internet. In January, students in the program will be eligible to get paid for entry-level front-end coding work for companies on the outside.

Data Security for Startups. As startups generate, collect, and use data at an increasing rate, state and federal regulators expect them to have security protocols in place. On Tuesday, Engine co-hosted a data security panel at the Nasdaq Entrepreneurial Center in downtown San Francisco to dig into these security issues. Read our blog post recapping the event and unpacking existing resources, including the FTC’s “Startup with Security” guide, to help startups navigate data security regulation and ensure they are adequately prepared for a breach.

Startup News Digest 10/9/2015

Our weekly take on some of the biggest stories in startup and tech policy.

ECJ Invalidates Data Safe Harbor. On Tuesday, the European Court of Justice (ECJ) invalidated the European Commission’s “safe harbor” rules that permitted U.S. companies to self-certify compliance with European data protection rules in order to legally transfer EU customer data to the U.S. The court determined that U.S. legislation permitting the NSA to secretly collect and review consumer data was inconsistent with the EU’s Data Protection Directive. Consequently, the safe harbor framework was itself inconsistent with the Directive, as U.S. companies could not claim to have adequate data security protections in place. While larger companies have quickly moved to establish new legal pathways for importing EU data or have secured data centers in the EU, smaller companies face a more daunting task in trying to comply with now unclear data protection rules.

Governor Brown Signs CalECPA. In a huge victory for startups and digital privacy, Governor Jerry Brown signed the California Electronic Communications Privacy Act (SB178), now the nation’s best digital privacy law, on Thursday. This landmark bill (which we’ve covered in past digests) updates digital privacy laws by requiring law enforcement to obtain a warrant before accessing an individual’s electronic communications. We are hopeful that this action by California will prompt similar movement in other states or at the federal level.

Closing the Gender Gaps. California passed a (another) landmark piece of legislation that would require women to be paid the same as men for doing “substantially similar work.” Though the governor acknowledges that this bill won’t solve the problem, he expects it to “help accelerate [the] progress.” It’s an interesting development in light of the dialogue in Silicon Valley regarding the promotion and retainment of women in the tech industry. Meanwhile, on the federal level, Senators Maria Cantwell (D-WA), David Vitter (R-LA) and Jeanne Shaheen (D-NH) introduced a bill that would reauthorize and increase funding for the Women’s Business Center Program, which improves business training and counseling opportunities for women entrepreneurs.

Capital Formation Bills Pass in House. The House passed two bills earlier this week aimed at making raising capital just slightly easier for startups. H.R. 1525, the Disclosure Modernization and Simplification Act and H.R. 1839, the Reforming Access for Investments in Startup Enterprises Act, contain measures that simplify and codify some of the regulations that govern how growing private companies raise capital. It’s encouraging to see members of Congress seek out ways to support capital formation for our country’s emerging companies and we hope our senators follow suit.

Marco Rubio Addresses Tech in NYC. Civic Hall hosted Senator Marco Rubio this week to talk about the on-demand economy. He spoke to the advantages of working for on-demand services, (flexibility of hours, mobility of work,) and recognized the need for a middle ground status between W-2 employees and independent contractors. He also called out incumbents, such as the taxi and hotel industries, for hindering innovation. It is the role of the government, Rubio said, to help those displaced by the new economy access the new economy through education and other opportunities.

Regulating Drones. As the popularity and pervasiveness of drones, (or unmanned aerial systems, UAS,) increases, lawmakers are grappling with the best way to ensure safety and privacy without needlessly inhibiting innovation in this growing industry. On Wednesday, Representative John Garamendi (D-CA) and Senator Barbara Boxer (D-CA) introduced the SAFE DRONE Act of 2015, which prohibits drone flights within two miles of an airport or active fire. While some argue these sorts of rules should be left to the Federal Aviation Administration to craft, others are growing tired of waiting on the agency to act after it missed a Sep. 30 deadline to implement drone rules.

House Passes the RAISE Act

Yesterday, the House of Representatives passed two bills supporting capital access for startups, H.R. 1525, the Disclosure Modernization and Simplification Act of 2015 and H.R. 1839, the Reforming Access for Investments in Startup Enterprises Act of 2015 or the RAISE Act. These new bills contain small measures that simplify and codify some of the regulations that govern how growing private companies raise capital. While their ultimate impact may be narrow, it’s encouraging to see members of Congress seek out ways to support capital formation for our country’s emerging companies. And we hope they’ll continue to, because there’s more work to be done.

Earlier this year we wrote a letter to House Financial Services Committee leadership, Chairman Joe Hensarling and Ranking Member Maxine Waters to express our support for the RAISE Act. The bill would codify an existing practice that allows startup employees with equity to resell their shares to accredited investors, thus enabling greater liquidity. The illiquidity of startup shares is an especially challenging aspect for startups in both raising capital and in hiring employees. Illiquid shares may discourage potential investors who are unwilling to tie up their capital in a high-risk asset class for an unknown or extended period of time. And for many potential employees, while stock options may be lucrative, they don’t offer the steady income stream that workers often rely on.

As the bills make their way to the other chamber, we hope our Senators will also recognize the value startups provide to our economy and similarly support measures that spur greater capital formation.

The City of Startup Love

This week Engine is traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. For more updates follow #RiseofRest on Twitter.

The city of Philadelphia is steeped in American history. The first American flag was sewn here, the Constitution was written here, and Benjamin Franklin started some of the country’s most important institutions here, such as public libraries and universities. That history certainly isn’t lost on Philadelphia, but on our startup tour of this city, we saw a more modern side—a place where new technological innovations are emerging from the city’s many universities and where more young professionals than ever are calling it home.

Universities play a pivotal role in Philadelphia’s rise as a hub for startup development. We visited the ExCITe Center at Drexel University where students are actively building apps, robots, and wearable technologies. At the University of Pennsylvania, student entrepreneurs showcased a diverse range of ventures and the university’s business school, Wharton is considered one of the best in the nation. This student community—over 400,000 including area universities outside the city—also serves as a massive talent pool for area employers. We heard from Philadelphia’s mayor, Michael Nutter, that nearly 50 percent of graduates from Philly area universities are now staying local after graduation, a significant increase from previous years.

Mayor Nutter joined the travelling crew around his hometown for most of the day, and he explained the ways in which local government has supported new startup activity. Startup PHL, for instance, leverages public and private funding to seed early-stage Philadelphia based companies. The city’s “gateway” program incentivizes companies with headquarters in Philadelphia suburbs to open a satellite office downtown. And the city has always been welcoming to immigrants, Mayor Nutter explained, acknowledging the important role immigrants play in starting new businesses.

Some of the city’s most promising young companies shared their business plans at the afternoon’s pitch competition held at Philadelphia’s National Constitution Center. One trend among the pitchers was clear: a commitment to social good, in addition to business opportunity. A number of health-oriented companies including Life.io and and SmartPlate combines technology, data and health sciences. Focus Food wants to bring urban aquaponics to the roofs of grocery stores in Philadelphia and across the country. The winning pitch, Scholly, helps students navigate and find scholarships to fund their educations.

We also witnessed how closely interconnected the entrepreneurial community is in Philadelphia. We met the support organizations bringing entrepreneurs together, such as Philly Startup Leaders, and the many local venture capitalists, such as Ben Franklin Technology Partners, dedicated to expanding early-stage funding in the region. Throughout the day we heard stories of how accessible the ecosystem is for mentorship and advice—perhaps that’s not so surprising in this city of Brotherly Love.

Entrepreneurs are Building a Better Baltimore

This week Engine is traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. For more updates follow #RiseofRest on Twitter.

This week marks the fourth Rise of the Rest road trip, and our first stop was Baltimore, Maryland. While we often hear about the challenges facing Baltimore, during our full day tour we saw another Baltimore story—a story about opportunity, innovation and economic development. Baltimore is one of the busiest ports in the United States and has a thriving healthcare sector, in large part driven by Johns Hopkins University’s hospitals and world class research facilities. Baltimore has 11 more universities and it’s just miles away from from major federal agencies like the National Institutes of Health and the National Security Agency which draws technology security talent to the region.

On our visit to Baltimore, we caught a glimpse of how entrepreneurs are capitalizing on the city’s leading industries. In the security space, we stopped by ZeroFox, a young, but fast-growing company with a cloud-based security platform that blocks malicious content from social applications. TechCrunch called its team “a who’s-who of some of the best and brightest security technologists.” We visited Fast Forward, an accelerator at Johns Hopkins that advances and commercializes technologies developed at the university. Many of the companies at yesterday’s culminating pitch competition also focused on new technologies in the health sector. ShapeU is a data-driven application digitizing the personal trainer, Sonavex offers a platform to detect blood clots, and Edessa is an automated hand washing system. The winner of the $100,000 investment from Steve Case was Sisu Global Health, a medical device company with an innovative blood transfusion product for healthcare providers in emerging markets.

We also saw some signs of entrepreneurial success in Baltimore, first and foremost at Under Armour headquarters. Under Armour has called Baltimore home since its inception. The company now has over over 1,000 employees, making it one of the city’s biggest employers. Their campus spans the Baltimore harbour and, unsurprisingly, includes a state-of-the-art fitness center complete with Under Armour’s newest wearable technology and health-tracking devices. Though Under Armour is no longer a startup, Baltimore entrepreneurs commented on how supportive the fitness-wear company has been of the ecosystem. The last startup tour of the day was at OrderUp, a food delivery platform acquired this summer by the Chicago-based Groupon—a sign to many of Baltimore’s competitive consumer technology sector.

We also sensed the broader commitment to fostering greater and more inclusive economic prosperity in Baltimore. The cries for justice after the killing of Freddie Gray this summer resonated deeply with the community and local leaders here, and many entrepreneurs are thinking about how to create new economic opportunity that’s accessible to more of Baltimore’s residents. One promising sign is the opening of Baltimore’s own Impact Hub—a local outpost for social business leaders that will open its doors within months. During a sneak peek of the space we heard from one young company making it easier for the formerly incarcerated to find jobs, as well as from a new local ice cream maker employing some of Baltimore’s youth.

Overall, we sensed great optimism in Baltimore about the potential to build on the city’s existing talent pool and create new solutions where challenges remain. From here, we’re traveling up the Northeast corridor to Philadelphia. Stay tuned for more dispatches from the road.

SEC Said to Finalize Long-Awaited Crowdfunding Rules Next Month

Since 2012, entrepreneurs and everyday investors have been eagerly waiting for the Securities and Exchange Commission to finalize rules that will to put Title III of the JOBS Act into effect, allowing all Americans—regardless of their income—to invest in startups. Earlier this week, Politico reported on SEC sources saying final rules will be announced in late October.  

Title III is most highly anticipated and most controversial provision of the JOBS Act still awaiting SEC rulemaking. While investment crowdfunding under Title III has the potential to radically expand capital access for startups, the statute contains some burdensome requirements for companies, such as requiring audited financial statements for small companies to raise funds from unaccredited investors (people that make less than $200,000 per year or have less than $1 million in assets).

Many experts in the business community believe these requirements could make crowdfunding unworkable for most businesses. Further, the proposed rules announced by the SEC in October 2013 put forth additional requirements for companies seeking to raise money through crowdfunding, prompting concerns from entrepreneurs, crowdfunding platforms, and investors about the debilitating and largely unnecessary costs these rules create for small issuers.

Meanwhile, the delay in SEC rulemaking has allowed us to watch as other crowdfunding markets have evolved. The UK, for instance, has a robust investment crowdfunding market open to all investors, and it's seen tremendous growth in the last few years under a remarkably sparse regulatory regime. Here in the US, rewards-based crowdfunding and accredited investor crowdfunding also continue to grow as more companies seek alternative, innovative forms of financing. These markets offer valuable lessons for lawmakers and regulators alike as they continue to refine the rules governing investment crowdfunding under Title III—lessons we’ll explore in detail in our forthcoming whitepaper, "Financing the New Innovation Economy: Making Investment Crowdfunding Work Better for Startups and Investors." Look out for its release in the coming weeks.

Though the startup community will be excited to see any action from the SEC in light of what has already been an extended delay, we need to make sure that whatever regulatory regime the SEC adopts is well-calibrated and favors the small, emerging companies that could most benefit from accessing new sources of capital. And regardless of the rules the SEC adopts, we look forward to working in the coming years to improve the US crowdfunding rules to help the startup economy continue to grow.

Northeast Startups, Here We Come!

The Engine team is getting back on the road to visit startups across the country. Next Monday, we’ll kick off our fourth Rise of the Rest tour with Steve Case, co-founder of AOL and CEO of Revolution, along with a busload of startup investors, startup community leaders, and startup advocates like ourselves. Together we’ll be highlighting the promise and growth of entrepreneurship far beyond the more familiar ecosystems like Silicon Valley. Our first stop is Baltimore, MD, then it’s on to Philadelphia, PA, Buffalo, NY, Manchester, NH and finally Portland, ME. In each city, we’ll be talking to entrepreneurs as well as business and community leaders. And at the end of each day, Steve Case will commit to investing $100,000 in the winner of a local startup pitch competition.

If you live in or around Baltimore, Philadelphia, Buffalo, Manchester, or Portland, come join us by RSVP’ing at the links below. Along the way, we’ll post dispatches from the cities we’ve seen. For updates, follow #RiseofRest on Twitter.

Baltimore: Monday, Sept. 28

Pitch Competition RSVP link

Celebration RSVP link

Philadelphia: Tuesday, Sept. 29

Pitch Competition RSVP link

Celebration RSVP link

Buffalo: Wednesday, Sept. 30

Pitch Competition RSVP link

Celebration RSVP link

Manchester: Thursday, Oct. 1

Pitch Competition RSVP link

Celebration RSVP link

Portland: Friday, Oct. 2

Pitch Competition RSVP link

Celebration RSVP link

Not Your Typical Tech Event: What We Learned at the Tech Inclusion Conference

You can also read this post on Medium.

This past week’s Tech Inclusion conference in San Francisco was not your typical tech event. The audience included engineers, entrepreneurs, policymakers and community activists who were far more representative of the diversity of the Bay Area - and the rest of the country, too. The speakers didn’t shy from pointing out serious flaws in the very industry in which they work. An Oakland food startup employing local youth catered the lunches. And a “Mommy Pod”—an RV outfitted for breastfeeding mothers—was stationed just outside the entrance.

Where’s the diversity in tech? It all showed up last week at Tech Inclusion, a conference where speakers and attendees discussed the major challenges to improving the makeup of tech, but also the potential and the widespread commitment to doing better. From rethinking recruiting, to repurposing federal education grants, to envisioning tech as a platform for social justice, ideas big and small were all debated with both energy and a kind honesty not always heard at Silicon Valley meetups. The conversations between panels and during networking sessions were frank and authentic: Speaker Julia Nguyen quite accurately said, "when you don't talk about something it perpetuates ignorance." Congresswoman Barbara Lee's speech was empowering and direct.  

For a full rundown of conference speakers and topics, visit Techinclusion.co or check out the recorded event on YouTube. While we can’t chronicle all the motivating conversations we had and tell you about all the inspiring people we met, here’s a few things we took away:

Demand Transparency - We can’t address the problem if we don’t understand the scope of it. A growing number of technology companies are making their employee diversity data public. Most recently, the fast-growing startup Slack announced its numbers. We applaud this initiative and hope it continues to gain momentum with more companies releasing data. But we also need to see more categories of data released. As one conference-goer noted, we have no idea how many people with disabilities are working in the tech industry. They represent a workforce that’s massively underemployed despite the skills they have to offer. And we’re just starting to talk about veterans too

Look to Role Models - Many tech companies are actively addressing the lack of diverse employees in their ranks, some by hiring an employee whose role it is to oversee all aspects of making their company more inclusive. The directors and leaders of diversity efforts at Pinterest, Yelp, Twitter, and Thoughtworks all shared their ideas for recruiting a broader range of talent and also ensuring these new employees stick around and grow their careers. For some, recruiting at historically black colleges and universities is a new focus. And nearly every company of substantial size has employee resource groups (ERGs) for workers to consistently discuss and address making the workplace more welcoming.

Invest in the Pipeline - The importance of the talent pipeline cannot be underestimated. While it won’t help the industry embrace a more diverse employee pool right away, investing in education now will ensure our next generation of engineers and entrepreneurs come from a wider set of backgrounds, (and that there are more of them with the skills to power our innovation economy.) The Department of Labor has estimated over 1.3 million new tech jobs will open by 2022. This presents a massive opportunity for communities that have been historically excluded from tech and dozens of community organizations, governments and educational institutions are working to bring them into the fold. These efforts—from neighborhood programs like Hack the Hood to national movements like Girls Who Code—must be supported, scaled and expanded.

Build Coalitions  - Witnessing so many connections being made over shared values and complementary efforts was one of the best parts of attending this conference. We sensed new partnerships and collaborations forming by the minute. Coalitions based on shared goals - especially goals as big as overhauling the makeup of a fast-moving, fast-growing industry - are critical. They allow us to share resources and ideas, amplify our message and expand our reach.

Advocate for Policy Change - As a policy organization, we can’t overlook the impact that can be achieved when policymakers heed our calls for action. The conference highlighted several leading examples when government has been a powerful tool, including a local ballot initiative to fund job-based education programs in Oakland and the White House’s tech hire initiative. Engine also led a policy workshop, “Achieving Inclusion Through Policy and Advocacy” where attendees developed their own policy action plans that included reforming community block grants to fund diverse entrepreneurs and requiring the IRS to tax corporations based on their gender pay gap. And we’ve invited anyone who wants to continue this conversation to joins us at engine.is/diversity.

Policymakers are just beginning to engage with our wider tech community to understand how to propel tech-based entrepreneurship and, most importantly, ensure more of our country participates. At Engine, we work every day to push policymakers to support inclusive forms of technology innovation and entrepreneurship.

Over the past year, we’ve been part of conversations with policymakers as well as community organizations and industry leaders about the future of the tech sector. Tech Inclusion was a powerful convergence of the many disparate efforts we’ve seen. Like us, we hope the other attendees found new fuel, new partners, and new avenues for pursuing change last week. And if you’d like to join our efforts, visit us at engine.is/get-involved.

Chile’s $40M Bet to Lure Global Startups: Lessons for Policymakers

Five years ago, the Chilean government launched Start-up Chile, a bold initiative to draw global entrepreneurial talent to its capital city. This new focus on innovation has since earned Santiago the nickname “Chilecon Valley.” Earlier this week, the Wall Street Journal reported that over 1,000 companies from 77 countries have so far been accepted into Start-up Chile, which provides early-stage startups with $40,000 in equity-free funding and residency visas for their employees, in exchange for locating their business in the country for at least six months.

The creators of Start-up Chile hope the influx of technology companies will ultimately help diversify the national economy, which has long been heavily dependant on the copper mining industry. (By some estimates, this single industry makes up 20 percent of Chile’s GDP and 60 percent of its exports.) Chile has now dedicated over $40 million to the program and its neighbors in Brazil, Colombia, and Peru have already launched similar efforts.

So is Chile on its way to becoming the next Silicon Valley, or at least the startup hub of South America? Well, as the Journal explains, the results are mixed. Most of the foreign startups that relocate to Santiago don’t extend their stays after the six-month program: over 80 percent leave Chile to scale their ventures elsewhere. As the article points out, this trend underscores some significant obstacles to innovating in Chile, in light of a regulatory environment that’s long favored established industries. One former government official noted that Chile can’t just provide public grants for startups, it must also create regulatory conditions that enable startups to challenge entrenched competitors. This is where the outcomes of the Start-up Chile program may offer some important lessons for policymakers around the globe hoping to cultivate tech ecosystems in their own cities, states, or countries.

Depending on who you ask, the tenets of the ideal tech ecosystem vary, but most analyses agree on several key pieces: a strong talent pool; access to financing; a dense network of ideas, mentors, and supporters; and a conducive regulatory environment. (We’ve previously written about some of these essential ingredients here). The concept continues to evolve as successful new ecosystems—from Los Angeles to Berlin—emerge. And seeing the positive economic results startups are generating, more and more governments are looking for ways to grow thriving entrepreneurial communities.

By luring companies with seed financing, Chile has taken at least one of these tenets seriously: access to capital. As the 2015 Global Startup Ecosystem Ranking from Compass points out, Santiago is among several cities, (in addition to Singapore and Tel Aviv,) whose focus on stimulating the financial foundation of its ecosystem has been successful, at least in the beginning stages of the ecosystem’s formation.

However, as the work we do at Engine reflects, government’s role in supporting technology entrepreneurship goes far beyond funding (though, we’d argue that the U.S. government could do more to open up new avenues to capital): every level of government must adapt to innovation-oriented policies. The Journal suggests Chile’s recent tax overhaul, which has been criticized by some for increasing the costs of doing business, could undermine the growth of its emerging startup sector. Regulations in other major national industries (with long, complicated histories), from banking to mining to energy, could further discourage innovation. Simply put, Chile’s greater economic priorities may not yet align with the needs of the nation’s budding entrepreneurs.

Chile’s program is still young and still evolving. The government is actively formulating new strategies to keep startups there longer, most recently with the launch of a $100,000 follow-up grant for select companies that agree to incorporate in Chile, stay for at least a year, and become mentors to local entrepreneurs, conditions meant to commit companies to expanding in Chile. And whether or not the program has generated major economic results, the influx of foreign entrepreneurs has created a valuable network in Chile for its own native entrepreneurs. In the first few rounds of applications, no Chilean companies were accepted. Now, 20 percent of the accepted companies have been Chilean.

Applicants and local entrepreneurs are also recognizing the benefits of capitalizing on existing economic strengths. The Journal points to one promising Start-up Chile company, BioFiltro, with a wastewater treatment technology—some of their first customers were Chilean vineyards that benefitted from BioFiltro’s cost-saving irrigation solution. This type of industry-focused model has already shown great promise in other cities all over the world. A public-private partnership in Des Moines, Iowa, for instance, created an insurance-focused startup accelerator to build upon Iowa’s long-standing insurance industry. In 2010, business leaders in finance joined forces to launch one of the first fintech accelerators in New York City and London, the world’s financial hubs. Startups built in Chile may find greater success by focusing on agriculture or even copper-mining. Chilean lawmakers could consider creating incentives that encourage innovation in these sectors.

What Chile has started to do is undoubtedly laudable, but Chile’s government and entrepreneurial community have more work to do if they’re going to produce leading technology companies and transform major sectors of their economy. As Chilean policymakers evaluate Start-up Chile’s early outcomes and forge a path forward, they should recognize that expanding and sustaining a strong tech ecosystem must go far beyond providing seed capital.

Celebrating Startup Day Across America 2015

The startup ecosystem is no longer exclusively a Silicon Valley, a New York City, or even a Boulder, Colorado phenomenon. Startups are flourishing in communities all across the country. We’ve seen entrepreneurs building new businesses in Des Moines, Detroit, and New Orleans on our Rise of the Rest tours and we’ve reported on some of the fastest growing startup ecosystems in the nation. On Wednesday, August 19, we’re working with Reps. Darrell Issa and Jared Polis, 1776, and dozens of startups and elected leaders  throughout the U.S. to celebrate Startup Day Across America—a national day bringing together members of Congress with startups in their districts.

This year, members of Congress will be making stops at startups, incubators, and co-working spaces in cities like Sacramento, Phoenix, and Charlotte for tours, demos and conversations with entrepreneurs.

Startup Day gives our representatives the opportunity to see firsthand how young and emerging companies are leveraging the power of technology to develop new products and services at an unprecedented rate, and also creating jobs in their districts. It provides entrepreneurs the chance to tell policymakers how and why supportive policy makes a difference: from patent reform to capital access, our lawmakers have the power to craft and champion legislation to support the new innovation economy.

We’ll be highlighting activities throughout the day. Follow #StartupDay on Twitter for updates - and if you’re hosting a member of Congress, make sure to let us know by posting with #StartupDay on your social media channels.

See you in Austin? Vote for Engine’s SXSW Panels!

It may seem early to be thinking about next year’s SXSW, but the panel picking process is already getting started. From now until September 4, the public can vote on over 4,000 potential panels for next year’s SXSW agenda. The team at Engine has submitted several proposals that we think will make for fascinating and informative conversation at the intersection of technology, startups, and policy. Plus, we’ve proposed a panel on how to launch a nonprofit organization like Engine. Help us make sure these panels get picked by voting for them today. You’ll need a SXSW account, and then you can vote for other great panels you’d like to see as well.

Last year, Engine discussed the “Politics of Innovation” with Techstars, Senator Jerry Moran, and Representative Kyrsten Sinema.

We hope to see you again in 2016!

Engine's Panels:

Tech at Issue in 2016 Election

Featuring Julie Samuels (Engine), Ron Klain (Revolution), Tod Ullyot (Andreessen Horowitz), Tony Romm (Politico)

Crowdfunding: Possibilities and Policy Challenges
Featring Evan Engstrom (Engine), Ryan Feit (SeedInvest), Sara Hanks (CrowdCheck), Michal Rosenn (Kickstarter)

Startups & Diversity: Can Public Policy Help?

Featuring Julie Samuels (Engine), Robin Kelly (House of Representatives), Robin Hauser Reynolds (Finish Line Features, LLC), Charlie Hale (Pinterest)

Interactive: Start a Nonprofit Without Tearing Your Hair Out
Featuring Chhaya Kapadia (New America's Open Technology Institute), Brooke Hunter (Engine)

Music: Start a Nonprofit Without Tearing Your Hair Out
Featuring Chhaya Kapadia (New America's Open Technology Institute), Brooke Hunter (Engine), Jesse von Doom (CASH Music)

More tech policy panels from Engine's friends:

Can Congress Tackle the Internet of Things?

Featuring: Rep. Darrell Issa, R-Calif.; Elizabeth Frazee, TwinLogic; Paul Daugherty, Accenture; Nicole Gustafson, National Football League.

Decrypting the Cyber Security Debate in Washington

Featuring: Rep. Will Hurd, R-Texas; Chani Wiggins, TwinLogic; Sonny Sinha, Department of Homeland Security; Denise Zheng, Center for Strategic and International Studies.

Are We Giving China the Internet? ICANN Explained

Featuring: Rep. Suzan DelBene, D-Wash.; Christian Dawson, i2 Coalition; Michele Neylon, Blacknight Internet Solutions; Tiffany Moore, TwinLogic.

Elise’s Data-Plan: Connecting Rural America

Featuring: Sen. Jerry Moran, R-Kan.; Rebecca Thompson, Competitive Carriers Association; Kristi Henderson, University of Mississippi Medical Center; Eric Woody, Union Wireless.

Following the Stream: Congress & Music Royalties

Featuring: Casey Rae, Future of Music Coalition; Rep. Mimi Walters, R-Calif.; Katie Peters, Pandora; Rachel Wolbers, TwinLogic.

Winter is Coming: Copyright Chill on Security

Featuring: Corynne McSherry, Electronic Frontier Foundation; Laura Moy, New America Foundation; Kyle Wiens, iFixit; Karen Sandler, Software Freedom Conservancy.

Pixelated & Political: The Internet in Washington

Featuring: Rep. Blake Farenthold, R-Texas; Rep. Eric Swalwell, D-Calif.; Rep. Renee Ellmers, R-N.C.; Michael Beckerman, Internet Association.

Internet Economy: In the U.S. & Abroad

Featuring: Sen. John Thune, R-S.D.; Michael Beckerman, Internet Association.

Embedding Human Rights in the Internet

Featuring: Joseph Hall, Center for Democracy & Technology; Karen Reilly, Independent; Eric Sears, MacArthur Foundation; Lindsay Beck, Open Technology Fund.

How to Fight ISIS without Breaking the Internet

Featuring: Rebecca MacKinnon, New America Foundation; Judith Lichtenberg, Global Network Initiative; Shahed Amanullah, LaunchPosse; Andrew McLaughlin, Betaworks.

The End of Online Free Expression?

Featuring: Gautam Hans, Center for Democracy & Technology; Dorothy Chou, Dropbox.

CDT/Fitbit: Ethics & Privacy in Wearable Research

Featuring: Michelle De Mooy, Center for Democracy & Technology; Shelten Yuen, Fitbit.

Everybody Dies: What is your Digital Legacy?

Featuring: Alethea Lange, Center for Democracy & Technology; Megan Yip, Law Office of Megan Yip; John Troyer, Centre for Death and Society; Vanessa Callison-Burch, Facebook.

Protecting the Digital You

Featuring: Nuala O’Connor, Center for Democracy & Technology

Euro vs. American Privacy: Clash of Civilizations?

Featuring: Jillian York, EFF; Ulf Buermeyer, Netzpolitik; Raegan MacDonald, Access; Chris Soghoian, American Civil Liberties Union.

Every City is an Internet City

Featuring: Nika Nour, Internet Association; Sen. John Thune, R-S.D.; Sen. Jerry Moran, R-Kan.; Rep. Fred Upton, R-Mich.

The Killer Congressional Office

Featuring: Seamus Kraft, Open Gov Foundation; Rep. Seth Moulton, D-Mass.; Sen. John Cornyn, R-Texas; Rep. Cathy McMorris Rodgers, R-Wash.; Sen. John Thune, R-S.D.

Internet of Things: Just Someone Else’s Computer?

Featuring: Rep. Blake Farenthold, R-Texas; Sherwin Siy, Public Knowledge; Jen Ellis, Rapid7; Sara Watson, Berkman Center.

Using data to power criminal justice reform

Featuring: Emily Shaw, Sunlight Foundation; Wesley Lowery, Washington Post; Tracy Siska, Chicago Justice Project; Clarence Wardell, Presidential Innovation Fellows Program.

The New Battle Over Encryption & How to Survive It

Featuring: Kevin Bankston, New America Foundation; Moxie Marlinspike, Open Whisper Systems; Jennifer Valentino-DeVries, Wall Street Journal; Heather West, CloudFlare.

No Encryption Backdoors, Please. Myths Debunked.

Featuring: Sunday Yokubaitis, Golden Frog.

Cryptowars 2.0: Silicon Valley vs. Washington

Featuring: Sara Sorcher, CS Monitor; Matt Blaze, University of Pennsylvania; Amit Yorak, RSA; Stewart Baker, Steptoe & Johnson LLP.

Smart Cars, Smarter Cities: New Transit Tech

Featuring: Michael Petricone, Consumer Electronics Association; Susan Zielinski, SMART; Andrew Collinge, Greater London Authority; Ashwini Chhabra, Uber.

Get your Goods: Unmanned Systems and 3D Printing

Featuring: Doug Johnson, Consumer Electronics Association; Gur Kimchi, Amazon; Ping Fu, 3D Systems; Richard Pelletier, Ford Motor Co.

Building better cities with better data

Featuring: Chris Gates, Sunlight Foundation; Tony Yarber, City of Jackson; Jennifer Pahlka, Code for America; Daniel X O’Neil, Smart Chicago Collaborative.

Be the Next Tony Stark

Featuring: Mike Geersten, TandemNSI; Gary Shapiro, Consumer Electronics Association; Christina Winn, Arlington Economic Development; Brad Tousley, Defense Advanced Research Projects Agency.

5 Best Startup Ideas in VR / AR

Featuring: Robert Scoble, RackSpace; Nonny De La Pena, Emblematic Group; Shawn Dubravac, Consumer Electronics Association.

High Res Audio in Every Earbud

Featuring: Jeff Joseph, Consumer Electronics Association; Maureen Droney, The Recording Academy; Aaron Levine, Sony; Pal Bratelund, TIDAL.

Online Privacy and the Price of Free

Featuring: Sunday Yokubaitis, Golden Frog; Alan Fairless, SpiderOak; Alex Bradshaw, Center for Democracy & Technology.

Zombie SOPA—A New Threat to the Open Internet

Featuring: Charles Duan, Public Knowledge; Mike Godwin, R Street; Abigail Slater, Internet Association; Ellen Schrantz, Office of Rep. Darrell Issa.

Autonomous Vehicles Are Here. But Are We Ready?

Featuring: Ian Adams, R Street; former National Highway Traffic Safety Administrator David Strickland; Jim Chen, Tesla; Jennifer Haroon, Google[x].

Disintermediation in Digital Content Markets

Featuring: Katie Oyama, Google; Casey Hastings, Pandora; Sasha Moss, R Street; Rep. Jared Polis, D-Colo.

Regulate All the (Internet of) Things!

Featuring: R.J. Lehmann, R Street; John Godfrey, Samsung; Eli Dourado, Mercatus Center; Lauren Soltani, Office of Rep. Suzan DelBene.

Disrupt the Grid! The Politics of “Homebrew” Power

Featuring: Catrina Rorke, R Street; Lynne Kiesling, Northwestern University; Tom Tanton, Reason Foundation; Doug Lewin, SPEER.

Ride the Wave: Data as Movement Builder

Featuring: Greg Fischer, City of Louisville; Dewey F. Bartlett, City of Tulsa; Michele Jolin, Results for America; Lori Sanders, R Street Institute.

Wi-Fi in Jeopardy: Losing the Signal

Featuring: Jessica Rosenworcel, Federal Communications Commission; Michael O'Rielly, Federal Communications Commission; Maura Corbett Glen Echo Group

Unlocking the Future of Music with Transparency
Featuring: Hank Shocklee, Shocklee Entertainment; Anthony Ray Sir Mix-A-Lot; Panos Panay, Berklee Institute for Creative Entreprenuership; Maura Corbett, Glen Echo Group

A Local Approach to Enabling Entrepreneurs, Despite Visa Limitations

With little movement on meaningful immigration reform from the federal government, entrepreneurs in Massachusetts and now Colorado are pursuing a local approach to enabling foreign-born startup founders to launch and grow their businesses in the U.S.

Under the current immigration system, international students graduating from U.S. universities have a short runway to secure jobs from companies that will sponsor their visas in order to remain here to work. Even for those students talented enough to land great jobs at U.S. companies, the H-1B visas commonly reserved for tech workers are in extremely limited supply. And for those graduates, or even current H-1B visa holders, looking to launch their own ventures, acquiring and retaining the appropriate visa is nearly impossible. (Though it should be noted the President’s executive actions are attempting to make this process slightly easier.)

Last year, Jeff Bussgang from Flybridge Capital Partners worked with former Massachusetts governor Deval Patrick and the Massachusetts Technology Collaborative to imagine and establish a new way for non-citizen students to jumpstart the H-1B visa application process so they can start businesses in the U.S.

The Global Entrepreneur in Residence Program partners with universities to select a group of “entrepreneurs in residence”, similar to the temporary entrepreneur mentors at many businesses and venture capital firms. Instead, however, these entrepreneurs are employees of a university that sponsors their visas.  As academic institutions, universities are not subject to the same H-1B visa caps as traditional employers. The entrepreneurs are expected to dedicate several hours a week to being a resource and mentor at the university while the rest of their time can be devoted to their startup. It’s a creative, thoughtful solution to an extremely outdated immigration system holding back too many promising entrepreneurs in this country.

The University of Massachusetts Boston and University of Massachusetts Lowell piloted the program last year. As a result, Harvard Business School graduate Vivek Gupta was able to keep his financial services technology startup, Wealthvine, in the U.S, and his fellow alumnus Bryan O’Connell was able to build his healthtech company here too. Massachusetts’s current governor, Charlie Baker, recently allocated $100,000 in funding to continue the program this year.

The initiative has also now expanded to other parts of the country. Brad Feld of the Foundry Group and the University of Colorado Boulder are together funding at least four experienced and emerging entrepreneurs through the program this fall. The selected entrepreneurs will be expected to work for up to 20 hours a week on campus.

The program benefits both entrepreneurs and the university. “The EIR program will bring outside talent to campus to mentor students engaged in a range of projects requiring an entrepreneurial mindset,” explained Phil Weiser, dean of the University of Colorado Law School and executive director and founder of Silicon Flatirons—the university’s law, technology and entrepreneurship center.

“While I’m not giving up on a federal solution, I plan to put my money and my energy into a state level solution,” Brad remarked in a blog post, touching on what’s so refreshing and inspiring about this initiative: it’s a local, collaborative solution to what’s become a massive challenge to overcome at the federal level.

Only Congress has the power to solve the issue at scale by revisiting our outdated visa system and establishing a true entrepreneur’s visa like those in Chile, Canada and the UK. In the meantime however, communities and universities with an interest in retaining the bright students already in their schools or attracting and supporting new global talent now have an alternative approach at their disposal. The Global Entrepreneur in Residence Coalition serves as a sort of open-source toolkit for other cities, states and universities to explore launching similar programs.

“Our hope is that by publishing the program's playbook, we can encourage other states to implement the program as well,” wrote Jeff on his blog.  Any state looking to support entrepreneurship would do well to follow the lead of Massachusetts and Colorado.

100 Girls Coding and Counting

You can also read this post on Medium.

When the Tennessee Code Academy started coding camps for kids in the summer of 2013, its organizers noticed something missing: girls. Young women weren’t signing up for the weeklong code camps despite generally high enrollment. “So we sat down with the team to figure out how to get girls to sign up,” explained Sammy Lowdermilk, who is now the director of the growing spin-off project, 100 Girls of Code.

Sammy and other partners, including several female programmers, decided to establish a one day workshop specifically for girls between the ages of 12 and 18. In the summer of 2014, they launched these workshops, at no charge to students, with the support of volunteer instructors and organizers in 12 different locations throughout Tennessee. Their goal was to reach 100 girls. Over 200 girls signed up for the workshops, and shortly thereafter the organizers were contacted by interested groups outside of the state. Could they offer these workshops in South Carolina? In Kentucky?

Since last summer, over 600 girls have attended free 100 Girls of Code workshops in nine different states and new chapters of the program continue to open across the country. Typically, up to 25 girls attend each six hour workshop, entirely led and supported by female programmers and volunteers. “We want to create an environment where the girl from the beginning is comfortable being herself without any distractions, any fear or intimidation,” explained Sara Kennedy, a front end web developer who leads the Columbia, South Carolina chapter.

The workshop begins with a short history lesson in computer science that specifically highlights women who were integral in the field early on, such as Grace Hopper and Ada Lovelace. Instructors also discuss current female leaders in technology: Marissa Mayer and Megan Smith, for instance. The students then get to coding. They learn some introductory HTML and CSS, and even dabble in programming languages, primarily through Scratch, an MIT-built tool that facilitates learning computer programming through creating interactive stories, games and animations. By the end of the workshop, the girls have created basic websites that tell stories about their day spent as a “girl of code.”

While the workshops only introduce computer programming skills, the hope is these few hours have a lasting impact. “At minimum, I hope they can walk away and feel proud about what women can do in technology,” said Sara. And at best, 100 Girls of Code alumni will seek out additional opportunities to build on their skills and eventually pursue a college education and a career in computer programming. They’ve already had a few girls come back to help assist in additional workshops.

100 Girls of Code is starting to explore how they can provide their alumni with additional coding education opportunities. In most locales, computer science is not offered in public schools. The organization is planning to establish more advanced workshops in some chapters and hopes they can eventually create a scholarship fund for girls graduating high school and planning to pursue STEM degrees in college. And they’re actively looking for sponsors to contribute supplies, resources and funding for the free workshops across the country.

“Software, hardware, the Internet—this all comes from someone,” said Sara “and it needs to be created by the people it’s for.” That includes women. According to one study, 74% of girls show interest in STEM fields in middle school, yet only 3% of them go on to pursue degrees in this field. 100 Girls of Code wants to change that, one girl at a time.

How Entrepreneurs are Building the Next New Orleans

This week Engine is traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. For more updates follow #RiseofRest on Twitter.

New Orleans, home of jazz, Mardi Gras - and startups - was the last stop on a whirlwind tour of the Southeast. As the city nears the ten year anniversary of Hurricane Katrina this summer and its 300th birthday in 2018, New Orleanians are more optimistic than ever about the city’s future and its continued economic growth. New Orleans has experienced 5 consecutive years of net in-migration, and since 2006 the greater metro area’s GDP has grown 20%.

As Tim Williamson, CEO and Founder of the Idea Village explained, local entrepreneurs aren’t trying to build the “next Silicon Valley”, but rather the “next New Orleans”. To grow new companies and chart the city’s forward-looking economic path, entrepreneurs, business leaders and local policymakers draw from the city’s many cultural assets and industry expertise, as well as the city’s history of perseverance.

New Orleans culture was on full display throughout our visit and peaked during a mini pitch competition aboard a Mardi Gras parade float, led by the “Krewe de Nieux”. As the colorful float rolled through the city’s streets, entrepreneurs shared stories about their growing businesses in food, health and wellness, music and even the shipbuilding industry. The afternoon’s pitch competition, at the brand new home for Jazz music in New Orleans, also featured companies with New Orleans cultural roots: WhereY’art, for instance, is an online community for artists and art-lovers. Other young companies in New Orleans, many of which have strong social missions, are building education and environmental solutions.

We also visited the BioInnovation Center, a technology business incubator where dozens of life sciences startups are creating new life-sustaining technologies. They benefit from biotech talent in the region and work with researchers from major area institutions including Tulane, LSU Health Sciences Center, Xavier and the University of New Orleans.

Another important piece of New Orleans cultural heritage is its diverse population, and local leaders are working to make sure New Orleans’ entrepreneurial future is even more diverse. One of the best examples of these efforts is PowerMoves, a program designed to increase the number of venture-backed minority-founded companies locally and nationally. At its helm is Earl Robinson who told us he hopes PowerMoves can help this country “reimagine the way people value African Americans’ contributions to society,” not only as athletes or musicians, but also as entrepreneurs. The program is clearly doing something right—a Power Moves company, GoToInterview, won the $100,000 pitch competition in New Orleans. CEO and Founder Crystal McDonald has built a software solution for employers in industries with high workforce turnover.

Perhaps the greatest asset New Orleans entrepreneurs have is the city’s sense of community. New Orleans has a history of connecting people through its many festivals and seasons—Mardi Gras, Jazz Fest, even Saints season. But continued growth of the startup ecosystem will also hinge on fostering and attracting talent and capital. There’s plenty of money in New Orleans, but very little is committed to funding new ventures. Hopefully, the Rise of the Rest stop helped inspire a little more investment from the many people who care about the future of this great American city.

Ensuring Entrepreneurs are Part of Atlanta’s Bright Future

This week Engine is traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. For more updates follow #RiseofRest on Twitter.

With over five million people, sixteen Fortune 500 companies and one of the top-ranked undergraduate engineering programs in the nation, it may be unfair to call Atlanta a city on the rise. Yet, the city’s environment for early stage entrepreneurs and new sources of innovation is still developing in many ways. The Rise of the Rest tour, with Steve Case at the helm, spent its fourth day on the road in Atlanta to learn from this vast, diverse city and to inspire the wider business, policy and educational leaders here to support its many entrepreneurs.

One of the Atlanta startup community’s challenges is fragmentation. Despite the proliferation of entrepreneurial activity, with 130 square miles and several city centers, Atlanta can be a sprawling place to navigate for both businesses and residents. Recognizing this challenge, David Cummings founded the Atlanta Tech Village in 2013 in an effort to bring the community together. Today, over 240 early and mid-stage tech companies are based there. SalesLoft calls the ATV home and Yik Yak did until recently—the messaging app experienced such rapid growth that they’ve now relocated to a new office space to accommodate an expanding team. Meanwhile, the Atlanta Tech Village continues to grow and newer centers for budding entrepreneurs have followed such as the Opportunity Hub.

We also got a sense of how Atlanta’s later stage technology startup companies are becoming part of a more connected Atlanta. The Ponce City Market is an 8,000 square foot space (in the old Sears Roebuck building) in an historic Atlanta neighborhood undergoing transformation, retrofitted for retail, residential apartments and offices. Cardlytics and Mailchimp showed off new startup-chic offices with lounges and snack rooms that rival any Silicon Valley startup’s digs. The Atlanta Business Journal reports Twitter may set up an Atlanta office there as well.

Yet another tech industry hub is the Atlanta Technology Development Center (ATDC) at Georgia Tech University. The ATDC brings together Georgia Tech students, industry experts and corporate partners through its incubator program and many resources. The center has enabled Georgia Tech students in engineering and computer science to find another career path after graduation—contributing their talents to a startup is made just as viable as working for a large corporation or going into research. These graduates remain a huge source of talent throughout the region.

Atlanta’s pitch competition put a number of promising new businesses on display - including Local Roots, which enables delivery of farm-grown produce to people’s homes, and  eCredable, which has created a platform that calculates alternative credit scores. The pitch competition’s winner was a great example of the best of Atlanta startups: Partpic has a diverse team and innovative technology that identifies parts via mobile images, in much the same way Shazam can identify a song.

What we saw in Atlanta was just a slice of a widespread movement made up of many leaders committed to the city’s future. With continued support, a focus on inclusive entrepreneurship that reflects Atlanta’s diverse population, and the engagement of (and capital from) the city’s biggest companies like Coca Cola and UPS, Atlanta’s entrepreneurs will have the opportunity to build on the city’s success.

Silicon Harbor is Building Momentum in South Carolina

This week Engine is traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. For more updates follow #RiseofRest on Twitter.

From one Carolina to the next! The Rise of the Rest tour stopped in Charleston, South Carolina today - a mid-size coastal town known for its well-preserved historical architecture, renowned Southern cuisine and a lively college atmosphere.

But are there startups here? At a breakfast with Charleston’s mayor of 39 years and local business leaders, John Osbourne, director of the local entrepreneur center, noted how the city’s evolved over the past few decades. It’s become a place where people come not only to vacation, attend school or even retire, but also a place people build businesses. “We’re at a tipping point,” said John, suggesting the city’s myriad entrepreneurship-centered activities are beginning to coalesce into a wider movement.

In addition to the region’s larger technology presence - with companies like Boeing - a number of newer and thriving technology companies set an example for the what’s possible here. We visited People Matter, a human resources software company that’s grown to over 200 employees since 2009. Levelwing, a data analytics firm, was originally founded in New York, but relocated to Charleston when it decided to expand.

The afternoon’s pitch competition showcased a diverse array of earlier stage companies, all with viable business strategies and creative approaches to developed industries. Eatabit built a product for online food ordering, OpenAngler has created the first online reservation system for fishing charter reservations and Dynepic’s devices turn standard kids’ toys into digitally connected smart toys. The winning startup, Bidr, offers solutions for fundraising event organizers to automate the bidding process. The hope is that $100,000 in new capital will ensure the company’s continued growth and serve as a catalyst for other entrepreneurs and investors to turn their attention towards Charleston.

South Carolina Governor Nikki Haley also joined Steve Case for a conversation about economic development in her state and the key role entrepreneurs play in that growth. She’s excited about the momentum in Charleston and hopes it spreads throughout the state. While the Charleston startup community is still young, it could soon give even more entrepreneurs reason to visit and to stay.

The Triangle’s on Top: Here’s a Region Serious about Startups

This week Engine is traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. For more updates follow #RiseofRest on Twitter.

After our first stop in Richmond, Virginia, the tour continued south to the Triangle in North Carolina. This area—encompassing the cities of Raleigh, Durham, and Chapel Hill—has already experienced significant success in its innovation and technology economy. Its top universities, leading healthcare and biotech companies, as well as world class research facilities at Research Triangle Park have all contributed to the region’s emergence as a center for tech talent as well as startup density and success. STEM jobs here grew by 39% in the past ten years—more than any other region in the country. And in 2014, 59 companies in the area were acquired and six went public.

These impressive numbers tell part of the story, but during our whirlwind day across the region, we learned there’s a lot more to building a thriving entrepreneurial ecosystem beyond existing industry leadership. Much of the local startup activity takes place within several impressive and energetic co-working spaces: HQ Raleigh in Raleigh, and American Underground, which has locations in Raleigh, Durham, and in a retrofitted old tobacco factory—a reclaimed relic of the region’s old economy. American Underground is home to over 850 entrepreneurs who come from the area’s many universities or decide to locate their companies here due to the ease of access to great talent, support and mentorship. And antother group of young entrepreneurs finds that kind of support right at home: the Thinkhouse is Raleigh is a live-in dormitory for startup founders.

What’s also exciting about this cohesive community is its genuine commitment to expanding opportunity and diversity: it’s a topic that’s top of mind for local leaders across industries. We spent some of the day with Talib Graves-Manns, founder of an education startup called RainbowMe and Durham’s Code2040 Entrepreneur in Residence. In addition to building his company, he is helping create a network of black entrepreneurs in the region. There are also organizations dedicated to empowering female entrepreneurs, like Soar Triangle and e51.

The day’s pitch competition was an opportunity for Raleigh-Durham to showcase many promising early stage ventures, as well as the support community that helps them succeed. The winner of Steve Case’s $100,000 investment was Archive Social, which provides tools that enable governments take greater advantage of social media. Archive Social presented themselves as a unique outcome of the Triangle’s entrepreneurial ecosystem with roots in a local accelerator, capital from local funds, and clients in local and state governments.

The Triangle is a model of how a region can leverage its many resources, even across independent counties and cities, to cultivate future generations of economic growth. And with their commitment to inclusive entrepreneurship, we hope they can set a national example.

Richmond’s on the Rise

 This week Engine is traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. For more updates follow #RiseofRest on Twitter.

We’re back on the road again, this time traveling through the Southeast, visiting some of America’s oldest cities where entrepreneurs from across the region are creating new ventures. We kicked off the tour in Richmond, Virginia, a town steeped in history, but with passion and promise for innovation. The sense of the new is palpable on the city’s streets where restaurants, independent retail shops, and theaters are popping up or undergoing renovations after years of vacancy. But perhaps Richmond’s greatest advantage in building an entrepreneurial ecosystem is the tight knit community that has galvanized around the startup economy. It’s one of these places where everyone seems to know and support one another.

The day began with a conversation among Steve Case, Richmond’s entrepreneurial leaders as well as three Virginia governors, two of whom are now Senators, and Richmond’s mayor. Governor Terry McAuliffe and Senators Mark Warner and Tim Kaine remarked on the tremendous growth of the state’s economy over the past few decades and the vast opportunities that lie ahead, for Richmond in particular.

We witnessed some of that opportunity and innovation in the making during a startup tour around this city. We met a number of companies that have grown out of the early stage accelerator Lighthouse Labs. Nudge is a software service that integrates data from health tracking devices. Blue Ocean Brain offers a micro-learning platform within companies to stimulate creativity and critical thinking. Maxx Potential facilitates technical workforce development by matching apprentices with companies in need of tech talent. Their program selectively identifies candidates and provides them with both coaching and on the job training, building a tech workforce that’s 100% on-shore. We also visited the headquarters of Evatran, whose slim and sleek device - a charging pad called Plugless Power - wirelessly charges electric vehicles.

At the center of Richmond’s startup ecosystem is the team behind New Richmond Ventures, a group with a mission to make their city a “world-class ecosystem of entrepreneurial talent, patient capital, and innovative start-ups.” By leading local capital investment, developing mentors, and forging relationships among businesses in the region, NRV is one of the Richmond startup community’s biggest assets.

The day’s final events included a pitch competition featuring eight local startups with a range of products and ideas: from a plant-based protein powder in hundreds of stores (also employing regional chickpea farmers) to a software that streamlines the 1099 tax return process for independently contracted employees. Ultimately, Wealthforge, which creates online tools to simplify raising capital for both startups and investors (as well as those platforms enabled by the 2012 passage of the JOBS Act) took home the $100,000 prize.

Today’s greatest takeaway about Virginia’s capital city? It might just be one of the startup world’s best kept secrets. With community, talent, leadership, and broad-based political support, Richmond is certainly on the rise.

An Outdated Visa System Leaves the Future of Innovation to Chance

Today U.S. Citizenship and Immigration Services (USCIS) will begin accepting applications from companies for H-1B visas - the primary work authorization program for foreign high-skilled employees, including those with expertise in science, engineering, and computer programming. These are workers that our economy depends on to power the country’s top technology firms as well as young and growing technology startups.

Yet despite an exponential increase in global demand for talented workers, the visa pool remains capped at 85,000, an arbitrary and outdated number set by Congress decades ago. USCIS already announced it expects the cap to be met within 5 days, meaning visa applications for high-skilled engineers, computer scientists and developers will be subject to random lottery. The futures of the very brightest men and women among these workers will be left to chance, while companies will again be forced to limit their workforces here in the US.

For all those who care about the future of our economy, April 1 is an opportunity to remind Congress that this woefully outdated immigration system is hindering the growth of high-tech companies across this country and the good jobs they create. Serious reform is long overdue, and it becomes more urgent with each passing year as we turn away more and more skilled, in-demand workers vital to both new startups and established companies.

Immigration reform must include raising the cap on H-1Bs and expanding the scope of other types of visas many companies rely on to hire talented workers. But a full modernization of the immigration system must also incorporate new pathways for both work authorization and citizenship for high-skilled foreign entrepreneurs seeking to build new companies here. Because it’s not just about allowing high-tech companies to hire educated employees to fill existing jobs; our economy also needs ambitious entrepreneurs to create new jobs, as well as new technologies that will continue to make America the world leader in innovation. Talent can be born anywhere, and an immigration system that welcomes and encourages entrepreneurship will make sure that these talented individuals can flourish here in the U.S.

While the President’s executive action addresses some of the shortcoming of our immigration system and aims to create visa pathways to allow entrepreneurs to build businesses in America, a truly modernized, updated and viable system can only come through Congressional reform. If we are to remain at the forefront of innovation, we must do everything in our power to bring the most talented innovators to the U.S.

Unless Congress acts to expand the pool of visas available for these innovators and make it easier for foreign entrepreneurs to create businesses and jobs in the U.S., we risk forfeiting our status as the leader of the technology world.

SEC Finalizes Rules for Title IV of the JOBS Act

Today, the Securities and Exchange Commission convened to vote on adopting rules to implement Title IV of the JOBS Act. The Commission voted unanimously, finally putting Title IV into effect nearly three years after the original legislation was signed into law.

Title IV addresses Regulation A, a securities registration exemption that allows private companies to raise a limited amount of capital without having to meet many of the onerous disclosure and reporting conditions required of publicly-traded companies. The JOBS Act gave Regulation A, (now reframed as Regulation A+,) new life by raising the offering cap from $5 million to $50 million. Some are calling  Reg A+ a kind of “mini IPO”, since it allows companies to raise funds from the wider public, including unaccredited investors, so long as their investment does not exceed 10% of their income or net worth.

The rules that were ultimately adopted divide Regulation A+ raises into two tiers, up to $20 million and up to $50 million. In the $20 to $50 million range, companies no longer have to register their securities with each state individually. The preemption of state blue sky laws, regulations that govern securities sales in each state, is being lauded as a huge win for the wider business and investment communities. These laws were a big reason why Regulation A was rarely utilized as a capital formation tool before the JOBS Act, when the maximum raise was capped at $5 million.

Nonetheless, companies seeking investment up to $20 million may still have to register their deals at the state level. The SEC’s rules include a coordinated state review process  managed by the North American Securities Administrators Association (NASAA), which could simplify the state-by-state registration process if implemented correctly.

“This mandate, often referred to as Regulation A+, is designed to help enhance the ability of small companies to access capital,” said White. “Small companies are essential to the livelihood of millions of Americans, fueling economic growth and creating jobs.” We couldn’t agree more with this statement. However, while Regulation A+ now offers a new financing option for growing companies, we still need alternative sources of financing for emerging startups seeking to raise far less than $20 million. These companies may still be subject to costly oversight under Regulation A+, especially if the proposed “coordinated review” process doesn’t streamline the system as promised.

The final piece of the JOBS Act—Title III crowdfunding from non-accredited investors—could help fill this gap for small, early-stage funding. However, the SEC has been unwilling to implement Title III crowdfunding thus far. And many experts in the wider startup and investment communities believe that even if the SEC were to enact the Title III rules it’s proposed, the costs of raising capital under Title III would limit its value to most startups.

Whether through Title III equity crowdfunding or some other approach, there continues to be a stark need for alternative financing options for entrepreneurs, particularly those from groups that have traditionally faced greater difficulty raising venture capital funds.

The SEC’s new Reg A+ is an exciting and important new funding mechanism. It will certainly help grow the startup economy and it opens participation in startup financing to the public like never before. But policymakers’ work is not done. They must do more to provide additional alternative pathways for creative and promising entrepreneurs to launch and finance the next wave of innovative startups.