Startup America: Urging recent grads to become entrepreneurs

16 Apr

In times of entrenched long-term unemployment, job creation becomes crucial. Bonnie Kavoussi reports in the Huffington Post article, Unemployed College Graduates As Vulnerable As High School Dropouts To Long-Term Unemployment: Report:

College graduates and advanced degree holders, once they are unemployed, are as vulnerable as high school dropouts to long-term joblessness, a new study has found.

Thirty five percent of unemployed college graduates and those with advanced degrees have been without a job for more than a year, the same rate as unemployed high school dropouts, according to a Pew Fiscal Analysis Initiative study published Wednesday. In fact, the long-term unemployment rate, for those 25 and older without a job, is nearly the same across all levels of educational attainment, the report says.

“A slowly rising number of job vacancies…hurts people regardless of their educational attainment,” said Gary Burtless, labor economist at the liberal think tank Brookings Institution. Nonetheless, he added: “Relatively speaking, there’s still a payoff to going to college. The college degree still has some vaccination effects against becoming a long-term unemployed person.”

Indeed, getting a college degree is a good bet for avoiding unemployment in the first place. The unemployment rate of college graduates who are at least 25 years old is just 4.1 percent, according to the Bureau of Labor Statistics. In contrast, 13.8 percent of high school dropouts, 8.7 percent of high school graduates, and 7.7 percent of college dropouts are unemployed.

The percentage of the labor force that faces long-term unemployment is at a record high of 2.8 percent, according to the Pew report. Thirteen million Americans are unemployed, 4 million (or 31 percent) of whom have been unemployed for more than a year.

As more and more college grads find themselves unemployed, they are looking for ways to earn a living.

Mary Beth Marklein has written the USA Today article, Programs encourage new grads to try entrepreneurship:

About 45 newly minted college graduates begin training in June to work for two years with small start-ups in struggling communities through a just-launched non-profit called Venture for America. Companies in Colorado and Massachusetts are offering paid summer internships to college students and new graduates through Startup America, a national initiative. A competition at Harvard, which opened an innovation lab in November, is providing funds and workspace to teams of students who have proposed ideas such as a car-sharing business in India and a restaurant offering interactive menus.

The flurry of opportunities reflects the mixed job picture for young adults. Corporations plan to hire 10% more new graduates this year compared with 2011, says a survey last month by the National Association of Colleges and Employers, which tracks job hiring trends for recent graduates.

Even so, employers scaled back on hiring in March, according to the latest Labor Department data, and younger workers were hardest hit. By the end of 2011, just 54% of 18- to-24-year-olds were employed, the lowest rate since the Labor Department began collecting the data in 1948, says a Pew Research Center report released in February.

“The majority of students are … taking what they can get,” says Clint Borchard, 30, a junior at the University of Nevada-Reno, who, with classmates, plans to launch a company this summer that manufactures affordable homes powered mostly by renewable energy. The business plan, which anticipates creating 40 jobs within five years, is a finalist in an inaugural campus competition aimed at spurring regional growth. The winning team will get $50,000.

On average, entrepreneurs are about 43 when they launch their companies, says the Kauffman Foundation, a research group that studies entrepreneurship. It says lack of access to capital and concerns about paying off student loans are among barriers for younger entrepreneurs.

Entrepreneurial survey

A November 2011 survey of 500 entrepreneurs ages 21-24 found:

• 30% started a business in college. Up from 19% in 2010.

• 29% are self-employed. Up from 20% in 2010.

• 72% said they do not feel they have enough support from banks. Up from 65% in 2010.

• 92% said they felt entrepreneurship education was vital given the realities of the new economy and job market. Up from 90% in 2010.
Source: Young Entrepreneur Council and Buzz Marketing Group

Startup America is helping some of these young entrepreneurs get started.

Here is information about Startup America from the FAQ section of their site:

Q: What is the Startup America Partnership?

A. The Startup America Partnership is a private organization working to help young companies succeed in order to accelerate job growth in America. We’re bringing the private sector together to maximize the success of America’s entrepreneurs, and augment America’s competitiveness in an increasingly global world. We are an independent nonprofit entity (NGO) that was launched at the White House in early 2011.

Q: How are you helping startups?

A: We’re bringing together some of the country’s most successful organizations to provide valuable resources to young companies with high growth potential. We are focused on providing resources in five key areas: Talent, Services, Expertise, Customers and Capital. We are also working on a regional basis to identify and help accelerate entrepreneurial ecosystems across the country. 

Which startups are you helping?

A: We’ve classified the startup ecosystem into the following groups:

– Idea: Someone has an idea for a business but has not yet established it.

– Startup: At least two people have created a business entity with the ambition to build a scalable company.

– Rampup: A team of five or more people that has secured at least two customers and has a clear focus on customer growth.

– Speedup: A company that employs at least 25 people and has established a revenue run-rate of $10MM or more.

While we celebrate and have resources for those in the idea phase, we are focused on helping young companies that are currently startups, rampups or speedups.

Q: Why just “young companies”?

A: Companies less than five years old account for all of the net job growth in our country between 1980 and 2005. These firms have the potential to one day employ hundreds, if not thousands of workers. Of course, we love entrepreneurs of all stripes, but in order to drive significant job creation over the next 3 years, we are focused on existing startups that have the potential for high growth. These high-growth firms can be in any industry (tech, education, finance, etc.) and from any region of the country.

Q: How is the Startup America Partnership funded?

A: The Ewing Marion Kauffman Foundation and the Case Foundation provided the initial funding for the Startup America Partnership. American Express OPEN, Dell Inc., Intuit Inc., and Microsoft are corporate sponsors. We have not received a dollar from any government organization.

Q: What is your relationship with the White House Administration?

A: We were launched at the White House in January 2011, and the Administration is a very important partner of ours with whom we work closely. However, we are not overseen or funded by the federal government. The Administration has its own Startup America initiative.

Q: Do you provide any capital or grants?

A: We are not a grant-making entity. We are partnering with a number of organizations who do invest in startups, in order to help get those funders in front of the young companies who may need their services.

Q: Who is leading the Startup America Partnership?

A: Our CEO is Scott Case, a proven entrepreneur who was the founding CTO of Our Chairman is Steve Case, AOL co-founder and current CEO and chairman of Revolution, LLC, and the chairman of the Case Foundation. The Ewing Marion Kauffman Foundation also provides leadership to the Partnership.Our all-entrepreneur board can be seen here.

Q: How can potential partners get involved?

A: If you have products or services that benefit young companies, fill out our partner form and we’ll be in touch.

Q: How can startups get involved?

A: If you’re an entrepreneur running a young company, register here to access to our partner resources. 

The Startup America home can be accessed here

Serious Entrepreneur posts at their site, The Pros And Cons Of Entrepreneurship:

Some of the pros serious entrepreneurs enjoy include:

  • Independence – to be your own boss and make your own business decisions is a big plus of entrepreneurship.
  • Excitement – if you enjoy taking risks and adventure there’s a lot to be said for setting up your own business.
  • Rules – if you are someone who is constantly kicking against the rules of a regular organization then you should head out on your own.
  • Flexibility – there’s a great amount of flexibility in working for your self. You set your own timings and you get to balance your personal and professional life quite well this way – provided you don’t turn into a workaholic!

Some of the cons include:

  • Salary – you will not have the benefit or security of a steady income to provide the financial backing you are used to.
  • Risk – there is a huge element of risk, which if not managed properly can be a disadvantage.
  • Benefits – initially there will be few, if any benefits, when you are getting started.

Starting a new business is tough work with an element of risk. But, the next Google may be out there in the head and effort of some new grad.


Pros and Cons of New Grads Starting a Business

Dr. Wilda says this about that ©

One Response to “Startup America: Urging recent grads to become entrepreneurs”


  1. Startup America: Urging recent grads to become entrepreneurs … | World Money Newsletter - April 17, 2012

    […] Startup America: Urging recent grads to become entrepreneurs … Bookmark It This entry was posted in Money and tagged bonnie-kavoussi, colleges, […]

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