Stephen Meade- The BullsEye Guy

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The Seeding of America- How to create a Micro-Loan economy

I was thinking the other day as I watched the news of the Solyndra collapse, that there has to be a better way.

To begin, I’m not against the fact Solyndra got a loan. What I think more about is the difference in approach.

To me, Solyndra is like planting one tree and “hoping” it grows.

What I’d like to propose is something a little different; I call it the “Seeding” of America.

Here’s what I mean.

In starting a company, the hardest part is the early stage capital. This money used to be called Angel Capital, where someone would invest early in an idea.

This was traditionally at the idea or formation stage, often long before a product was built, and certainly before a customer.

I’ve long said that raising money is easy and can be summed up the three simple words; “Capital follows Customers”.

THAT is the easy part. The hard part is getting an idea or business far enough along to actually get a customer.

If you were to think about the difference between planting a tree and hoping it grows large, versus spreading grass seeds on a lawn and hoping to have a great yard, there is a big contrast.

If you were to spread seeds of grass, surely there would be some sprouts that would die, perhaps many.

However, my guess is there would be a large majority that would survive and flourish. Of course the grass would need watering (i.e. funding, customers, etc.), but it would make more sense to water a lawn when you can see the signs of growth.

What does all this have to do with business?

There is a difference between 50,000 businesses getting “seeded” or started, versus picking a few big winners.

In the investment world, this is actually called “seed” capital for a reason. It’s in the early stages that a company needs the hope or belief.

How would it work?

Let’s look at a Government Program (or privately funded one for that matter), and put some math to it.

Let’s begin with a $2.5 billion dollar program.

Each State is given a mandate to invest $50,000 in 1,000 companies. These would be small business, startups, ideas, entrepreneurs, students, etc.

That would be 50,000 businesses seeded in one year!

Let’s say 5% survived to become an average small business (employing 25 people), that would be 2,500 successful companies with a new employment base of 62,500 people! If 1% of those 50,000 companies went on to become the next Google, Cenoplex, or high-flying super growth, world changing company.

THAT is an engine. Could that success number be higher?

Absolutely! The constant decline in the cost of technology, the proliferation and access to knowledge through the internet, the ability to create and provide a needed service has all made the opportunity to start a business more attainable than ever.

I thought of this similar to a Micro-loan program in other countries. What $200 may be to a person in Bangladesh is what $50,000 may be to someone in the US?

The disparity in the amount of course comes in the cost differences between countries, but the results could be no less empowering.

What was needed in the countries with the micro programs were two things:

1- Someone who believed in the goodness of the person trying to improve their live, and

2- A system with the funds and process to deliver the seed capital.

The argument against this would be- well, what if they fail? What if there is fraud? What if someone steals the money?

My belief (naively or not) is that there are a LARGE number of people who actually want to succeed. Want to have a business, want to create something.

This should also be viewed not as risk capital, but as “REWARD” capital.

Risk capital says- If I invest and lose all my money, that is a risk. This is what the view is currently with Solyndra where many are clamoring for an end to government subsidies and investments.

I would agree that the Government may not have the best track record at picking winners and losers; which again is a byproduct of “picking” a single company or industry.

Reward capital is the view that if you invest in a company, that money is spent locally, people are hired, taxes are paid, technology and consumables are purchased, and yes, you may lose some; but there may be a far larger majority of companies who will make it. Succeed!

The reward should far outweigh the risk, especially if the risk is spread out and allocated.

Would you lose some? Sure? Just like when you plant 1 Million seeds of grass, you’ll lose a few.

But the benefits far outweigh the risks.

There are good people, great ideas, hardworking individuals, all looking for an opportunity.

This country was built on those beliefs.

Someone needs to believe in them.

Let’s start the planting the seeds of greatness.

March 2023
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