Push to Help Create American Jobs through Entrepreneurship
The Problem
For many years, we’ve seen jobs move out of the U.S. There have been better opportunities aboard and highly educated foreign workers have been returning home to counties like China and India. Unfortunately, this means that the U.S. is no longer as strong in entrepreneurship. One of the problems is visas are not being provided to keep these workers.
A Solution
New legislation for startup visas is aiming to keep educated and skilled workers here and create jobs. As broken down by Vivek Wadhwa in Bloomberg Bussinessweek article, the Startup Visa Act has these 3 conditions:
- “Entrepreneurs living outside the U.S. qualify if an American investor agrees to fund their entrepreneurial ventures with a minimum investment of $100,000. Two years later, the startup must have created five new American jobs and either have raised more than $500,000 in financing or be generating more than $500,000 in yearly revenue.
- Workers on H-1B visas, or graduates from U.S. universities in science, technology, engineering, mathematics, or computer science, are eligible if they have an annual income of at least $30,000 or assets of at least $60,000 and have had a American investor commit investment of at least $20,000 in their ventures. After two years, the startup must have created three new American jobs and either have raised more than $100,000 in financing or be generating more than $100,000 in yearly revenue.
- Foreign entrepreneurs whose business has generated at least $100,000 in sales from the U.S. After two years, the startup must have created three new American jobs and either have raised more than $100,000 in financing or be generating more than $100,000 in yearly revenue.”
A Call for Super Angels
However, not just anyone can invest under this act. The requirements are that the investor must be a:
- Qualified venture capitalist, U.S. citizen who makes a minimum of two $50,000 equity investments every year for the last three years
OR
- Qualified government entity
If the entrepreneurship fails, they can either try again or return to their home country. Failure is a risk all entrepreneurs must take. It would be advantageous of venture capitalists to lower risk through protecting it with insurance. This would help with liability. These new startups is chance to create new jobs and new competition.
Tax Time: Do you know about these new write-offs?
It can take a lot of capital to grow a business. Tax season can be a bit daunting, if you don’t know about some tax write-offs that you can take advantage of to help cover those growing expenses.
According to Eileen P. Gunn, here are 5 tax breaks that could possibility apply to you:
- Did you create new jobs?
- If you have added to your head count between February and December 2010 and those new employees had been on unemployment for 6 months or more prior, then your business could qualify for a 6.2% deduction.
2. Do you provide your employees with cell phones?
- Cell phones use of business is a direct write-off
3. Do have large company sport-utility vehicles?
- If you bought or plan to buy an SUV that’s heavier than 6, 00 for your business between September 8, 2010 and December 31, 2011, then you may be able to write the whole value in one tax year.
4. Did you buy new equipment?
- There is a temporary write-up offer in order to get businesses to spend a little more. If you bought or plan to buy new equipment for your business between September 8, 2010 and December 31, 2011, then you may be able to write off 100% of the cost.
5. Do you pay for employee health insurance?
- Small businesses can write-off 35% of premiums that you pay for employees’ health insurance. This tax break may be available to you.
These new tax breaks will be helpful for many entrepreneurs. Another quick tip on the insurance side is that make employee health insurance is group health. It is an easy and paperless way for employee benefit management. We encourage you to check out these 5 tax breaks and group health for this tax season. Make your life easier!
Tips for Finding the Right Business Partner
photo credit: DearPioneer,
There are a lot of risks that come with a business. One of them is finding the right business partner. However, finding the right business partner will help reduce and share those risks. The key elements of a great partner according to Mark Zwilling, Startup Professionals Musings, are:
- Readiness and willingness for teamwork
- Similar operating style and work ethics
- Share the same objectives and vision
- Implement the same performance indicators to measure the partnership
- Able to make changes to the business model as needed
These elements are much like finding the proper insurance broker. The right insurance broker should help you reduce your risks with the right policies to find your needs. They should have the same interest — your interest.
Do you have any insights to finding the right business partner? Post them here!
More Investors Take Legal Action Against Mergers
Companies have certain interests that they are suppose to protect including their shareholders. When making decisions and deals, these best interests of the company and investors are suppose to be considered.
According to an Insurance Journal article by Tom Hals and Jonathon Stempel, as more investors take legal action against mergers that are seen as “unfriendly to shareholders,” legal fees are increasing as well. It is the lawyers that are winning in this situation. The lawyer fees are pushing $4.5 million, leaving the shareholders with little to nothing. The question that critics are asking, “Are stockholders really being protected?” There is a call for judges to really consider if value is being created for stockholders.
It is important for investors to be aware of these fees and lawsuits as they have tripled in the last year. One way to protect your investment is through risk management for control and insurance especially business liability insurance.
What is your take on the increased lawsuit fees? We want to know!
Viable Business Model? 10 Questions You Should Ask
It is no surprise that startup businesses can be like a rollercoaster ride. It takes time to figure out what works and what needs to be reworked. Martin Zwilling, CEO of Startup Professionals, suggests that these 10 questions should be asked in order to construct a viable business model. Here is a summary of those questions:
- What is the need that you serve or problem you solve? Your business needs to add value.
- Who are you selling to? Define your target market.
- What is your marketing plan? You need to reach your target market.
- How will you produce your product or provide your service?
- What’s your distribution plan?
- How will you make money? You need to provide a revenue model.
- What are your costs? Don’t underestimate your projections.
- Who are your competitors?
- How are you unique and how are you going to differentiate your product or service?
10. What does the market look like? You need to know the size, growth and share.
Once you have answered these 10 questions, I’d like to add that you should know how you are going to protect yourself and your investment. Business insurance is no longer just for large businesses. Startups have the high risk, which you should start managing from the beginning.
Do you have any other recommendations for a business model?
The 2 Ps: Passion and Patience
I came across this video the other day of a TED talk by Gray Vaynerchuk, entrepreneur of Wine Library TV. It’s a few years old but I think the message is true.
Passion and Patience!
He talks about being successful is about living by passion and patience. If you don’t love what you’re doing, the why do it? Don’t use excuses of why not. If it’s your passion and you care about the people you’re working with and for, then that’s what matters. You need patience because to get to do what you love you, it’ll take time. You need to put in the effort.
- Be Motivated.
- Be ready to hustle.
- Have a business model.
- Have passion.
- Have patience.
Also, finding something that you love might be part of creating the right culture. If you’re passionate about it, then make others passionate about it too. For example, at CSI, not everyone might be passionate about insurance, (I doubt we all woke up one day and knew it was our calling), but we’re passionate about the company and care about the people. Like Gray said, “Do what you love, no excuses!”
2011! Celebrate Risk
The economic conditions have been tough on everyone, especially start-up businesses. The days looked gloom but it suppose to be looking up. 2011 is a time to move forward with the attitude of taking smart risks. Steve Fredrick and Don Rainey, general partners at Grotech Ventures, see 2011 as a time for a new beginning, “we must once again celebrate and reward the risk-takers among us as we head into 2011, because it’s these groups of individuals that will help pull us out of the morass of the past two years.” In addition to this attitude, they compiled a list of seven risks that could result in success. Here’s a summary of the list:
- Starting spending again… but do it wisely. It helps boost the economy.
- Hire new assets. It’s a buyers’ market!
- Don’t be afraid to change your core business. The current market is constantly changing, why not your plan from A to B?
- Investigate new revenue models and seriously consider them.
- Sell the company or combine for better assets.
- Build impactful partnerships and extend your reach.
- Enter new geographic markets. China, India, Brazil – emerging markets are rapidly growing.
We all have heard that high risk gives high return. That is if the risk is smart. So this doesn’t mean be reckless – manage your risk. Make 2011 work for you!
Create and Enjoy Life: Inspired by Tony Hsieh and his Delivering Happiness
Source: ImageShack
For our company retreat, we were all asked to read the book Delivering Happiness by Tony Hsieh, CEO of Zappos.com. Now this blog post is not intended to be a book review, (there’s plenty of them out there on the web), but more of a story of my own thoughts. Prior to reading this book, it didn’t think twice about Zappos. When shopping online I usually came across it and even had ordered my prom shoes from it. I was happy with the free shipping and return policy. However, after reading the book I have a whole new outlook and appreciation for what Tony Hsieh is doing.
I would say he was born an entrepreneur— he started selling mail-order buttons at an early age. But instead of being focused on the money, he was focused on creating and building something. He looks at the ultimate goal of wanting to be happy, which is if not all but what most people want out of life. Tony describes this in the first section of the book,
“I thought about how easily we are all brainwashed by our society and culture to stop thinking and just assume by default that more money equals more success and more happiness, when ultimately happiness is really just about enjoying life.” (p. 53)
This statement is also apparent in Zappos core values. So my advice to you is to take note. Delivering Happiness shows, Tony and Zappos are doing something right.
In his words, there will never be another 2011. What are you going to do about it?
D&O Insurance? 3 Tips You Should Know
D&O insurance stands for directors and officers insurance. As defined by Insurance Information Institute, it is the insurance that covers directors and officers liability “for negligent acts or omissions and for misleading statements.” This becomes even more important when the economy is down and levels of uncertainty are high. We recommend that private portfolio companies to have D&O insurance in order to lower personal liability risk as part of their risk management strategy. Here are 3 tips to maximize your D&O insurance:
- Mange your D&O Claim Process
You should know how your insurance company is going to react when a claim is made. Understand the steps of the process that will be involved. Be clear on any exclusions that might be in the policy.
- Negotiate D&O Policies to Improve your Coverage
There is usually a standard form for the D&O insurance policies. However, to improve the terms and conditions to fit your unique business, coverage can be negotiated. Insurance brokers with established relationships with insurance companies can help you do this.
- Private Equity Firms can Develop a Portfolio Company D&O Insurance Program
You can work with your insurance broker to develop a portfolio company D&O insurance program by using the firms leverage to create a list of policy enhancements.
D&O insurance is important aspect of risk management. So you need to continue to protect it and know your availability of liability.
