Can the JOBS Act Jump-Start Entrepreneurship?

Emineo Media Entrepreneur

Emineo Media EntrepreneurCan the crowdfunding-focused Jumpstart Our Business Startups (JOBS) Act really spark entrepreneurship, economic growth and hiring?

Rep. Patrick McHenry (R-N.C.), a staunch advocate of crowdfunding and contributor to the #FixYoungAmerica campaign to promote youth entrepreneurship, believes it can.

Businesses can’t raise money through crowdfunding in a meaningful way right now because of federal restrictions and red tape. McHenry wants to change that. A bill he introduced to near-unanimous support in the House became part of the foundation for the JOBS Act, which has been passed by Congress and awaits President Obama’s signature.

McHenry says he’s fed up with the pattern of entrepreneurs being forced to finance their projects through their own lines of credit, sometimes backed by the value of their homes. He sees two problems with this way of doing things: First, it can be difficult to get credit, and second, the value of many homes tanked during the financial crisis of 2007-2008, making mortgage-backed financing a much weaker option for capital-seeking entrepreneurs.

“The result of these realities is plain and simple,” writes McHenry in his chapter for the #FixYoungAmerica book. “Countless young, ambitious entrepreneurs are out of luck as they look for capital to expand and compete on the open market.”

Crowdfunding, says McHenry, is the solution to those problems. It would allow entrepreneurs to raise money from many different investors, each pitching in a small amount compared to angel investors and their giant checks. Theoretically, that mitigates the risk of investment for each contributor.

McHenry first became aware of the concept after reading a letter written by Rep. Darrell Issa (R-Calif.). Issa, a former technology CEO, is one of the most technologically astute members of Congress. In the letter, he wrote 33 questions to the chair of the U.S. Securities and Exchange Commission, which regulates the U.S. stock market.

“Serving as chairman of the House Oversight Subcommittee for issues related to financial services and banking regulations, I had the luxury of reading this letter before the ink had dried,” writes McHenry. “I soon realized I was flipping through the pages of a letter that would transform the way Congress prioritized capital formation.”

One particular question caught McHenry’s attention: Would the SEC allow small businesses to engage in crowdfunding?

Crowdfunding, says McHenry, piqued his interested because it reminded him of the way political campaigns raise money — often, from lots of donors giving small donations (PACs aside, of course).

McHenry threw his energy into researching crowdfunding as a mechanism for investing in small businesses. To learn more, he went to websites such as IndieGoGo, which lets people raise money from “the crowd” for charities, businesses and other projects. Eventually, McHenry was convinced that crowdfunding was part of the solution to drag America out of its economic slumber.

“I was becoming a diehard fan of crowdfunding, especially since it utilized online technology to increase small business access to new sources of financing,” writes McHenry. “Social networks were not just for keeping up with friends — they could become marketplaces for everyday investors and entrepreneurs.”

After McHenry introduced his Entrepreneur Access to Capital Act, he used a House Financial Services Committee hearing about it to spark a conversation on the Hill about crowdfunding.

“As each witness spoke,” writes McHenry, “members and staff began to gain interest in crowdfunding, a form of capital formation that was foreign to them that very morning.”

The idea was met with some resistance from McHenry’s colleagues who believed crowdfunding was too risky of an investment platform. McHenry, though, says that dispute was a blessing in disguise — it got entrepreneurs fired up and focused on explaining why the status quo wasn’t working.

Eventually, the Financial Services Committee unanimously approved the bill and sent it to a full vote in the House. It sailed through on a 407-17 bipartisan vote, after receiving President Obama’s blessings in a jobs speech. McHenry’s bill was then included in a larger small businesses reform package — the JOBS Act — which has been sent to the White House for the president’s signature.

“After observing how quickly our nation’s leaders were able to learn and embrace a new and democratic form of capital formation,” writes Rep. McHenry, “I am more confident than ever that the U.S. will once again retain its title as the world’s most dynamic and entrepreneurial marketplace.”

Do you think crowdfunding is a viable way to jumpstart American investment and growth?

Source Mashable

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Secrets of the 10 Most-Trusted Brands: Nordstrom

Emineo Media Nordstrom

10. Focus on the customer: Nordstrom

When mythic stories circulate about your company’s awesome customer service, you know you’re doing something right. That’s the hallmark of this upscale department store, which is rumored to have once graciously accepted the return of a set of tires, even though the store has never sold tires.

“Nordstrom is all about the power of delivering exceptional customer service that goes above and beyond a typical service experience,” Northwestern’s Calkins says. Emineo Media Nordstrom

Nordstrom scored strongly among respondents for concern for the customer, as well as for the quality of the products in its nearly 230 stores. Attentive service–which includes a liberal return policy, e-mailing digital photos of new items to regular customers and sending thank-you notes after purchases–frees the Seattle-based retailer from having to focus on competitive pricing, which helps keeps profit margins higher.

“They don’t pretend to have the lowest prices, but they don’t have to,” Calkins says. “When people go there they know they may pay a little more, but the service is so good that it makes it worthwhile.”

Respondents criticized Nordstrom for not providing consumers with much information about its corporate decision-making policies, but Calkins contends that when building a brand identity, it’s OK for your proposition to focus on one principal element, as long as you do it right.

“What makes this brand tick is the service experience, not the approach,” he says. “Nordstrom has never focused on its company or its people; all of that positive energy is directed at the customer and the retail experience, and it’s the secret to their success.”

Source Entrepreneur

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Secrets of the 10 Most-Trusted Brands: Southwest Airlines

Emineo Media Southwest-Airlines

9. Serve up the quirky: Southwest Airlines

This low-cost carrier has consistently set its own route in the airline industry, creating a distinct personality through everything from open passenger seating to flight attendants who sing the safety demonstrations.

“Southwest has always been a very independent brand that’s quick to break the norms of the airline industry,” says Tim Calkins, clinical professor of marketing at Emineo Media Southwest-AirlinesNorthwestern University’s Kellogg School of Management. “From the seating assignments to the fact that it doesn’t list in many of the big online reservation systems, it has always prided itself on being very different.”

Calkins says much of Southwest’s brand success comes from the fact that although its operations and corporate culture are idiosyncratic, those differences support the company’s central function.

“Southwest has a fun, energetic corporate culture that’s unique in the airline industry, but at the core they are a very proficient operation that gets travelers from point to point in an efficient, affordable manner,” he says.

While the airline received low ratings for not sharing information on decision-making, those protective measures may be among the reasons it continues to thrive. Several of the big carriers have tried to follow Southwest’s model with low-cost subsidiaries (think Delta’s Song and United’s Ted), but none have been able to maintain them.

“You can see what [Southwest] does–they fly one kind of airplane, they don’t charge for baggage and they have friendly employees–so you’d think someone could replicate that, but they can’t,” Calkins says. “The magic of Southwest is that even though the brand has many unique elements, all of the different pieces work together to serve its customers in a unique way.”

Source Entrepreneur

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