Startup Act is guideline for supporting growth of new companies and jobs.

Like a doctor with a syringe of epinephrine, the Kauffman Foundations want to help national lawmakers give the arrhythmic economy a boost with a shot of innovation.

At the National Press Club in Washington on Tuesday, Kauffman leaders Carl Schramm and Robert Litan unveiled the Foundation’s Startup Act proposal to jump-start the struggling economy and increase job creation by boosting the growth of startups and new businesses.

New companies—those that are less than five years old—create practically all of the growth in U.S. jobs, according to the Kauffman Foundation. But a recent Kauffman study found that while startups are being created at a faster rate, the number of new companies with employees has dropped. Basically, the new companies are “starting smaller and staying smaller,” said Schramm, president and CEO of the Kauffman Foundation.

To reverse this trend, the Kauffman Foundation has developed its proposed legislation to guide lawmakers in smoothing the road for small companies to grow and create jobs.

"We hope that by outlining this idea for comprehensive startup legislation, we can stimulate a long-overdue, bipartisan conversation in this country about how to maintain and reinvigorate the entrepreneurial energy that has made our economy the most innovative in the world," Schramm said.

In a news release, the Kauffman Foundation said job creation is a nonpartisan issue, and the proposed Startup Act will focus attention on the key role that high-growth startups must play to ensure continued U.S. economic strength, as well as the need for comprehensive legislation aimed at helping startups.

Specific changes in government policy that the Startup Act proposes include:

• Welcoming immigrants capable of building high-growth companies to the United States by providing "Entrepreneurs’ visas" and green cards for those with degrees in science, technology, engineering and math.
• Providing new companies with better access to early-stage financing, creating capital gains tax exemptions for long-held startup investments, providing tax incentives for startup operating capital, facilitating access to public markets, and allowing shareholders of companies with market cap below $1 billion to opt-in under the Sarbanes-Oxley Act.
• Accelerating the formation and commercialization of new ideas by creating differential patent fees to reduce the patent backlog and providing licensing freedom for academic innovators.
• Removing barriers to the formation and growth of businesses through the introduction of automatic 10-year sunsets for all major rules, establishing common-sense and cost-effective standards for regulations, and making assessments of state and local startup and business policies.

"Achieving sustained economic growth will require more bold entrepreneurs who can launch and build new 21st century companies, a continuing stream of new ideas capable of being commercialized, fewer roadblocks to launch and grow these new enterprises and low-cost capital available to finance them. Simply put, the U.S. economy needs more high-growth startups," said Litan, vice president of research and policy at the Kauffman Foundation.

The unveiling event for the Startup Act included videotaped remarks from House Majority Leader Eric Cantor (R-VA) and Senator Jon Tester (D-MT).

Sen. Tester, who today chaired a hearing on access to capital for high-growth startups, said, "I want to thank the Kauffman Foundation for bringing so much energy and momentum to this discussion and look forward to continuing our work to get startups the resources they need to maximize the potential for innovation and job creation."

Click here to read the proposed Startup Act

Click here to read a fact sheet on the proposed Startup Act