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Executive Summary

 
Dear United States Innovation Policy Influencer 

We are writing to you as a group of Silicon Valley based innovators – from entrepreneurs in garages to leaders of labs – to describe the gravest issues we face as entrepreneurs at this critical time in our innovation environment.  We are a leadership group of fifty that operates from an informal network of approximately three hundred individuals, who have collectively participated in $1 billion in research and development and in startup companies across half a dozen industrial sectors.  We have no lobbying organization nor earmark agenda – just our experience, insights and suggestions to share.

Since the founding of our nation, an innovation engine has propelled our economic growth. Our unique cultural, legal and political environment led us to pioneer standardized parts in the 18th century, higher-yield farming methods in the 19th, and the many and diverse technological advances of the last century. These industries created millions of good paying jobs and raised the living standards for all. But that engine is now sputtering, and unless we take immediate steps, may stall.  We invite you to come to Silicon Valley to engage in an Entrepreneurial Policy Roundtable Discussion to explore with us the urgent issues we see.

Currently, our nation faces an unprecedented array of challenges -- economic, social and environmental – all of which need to be addressed in a balanced and sustainable way. Now, more than ever, we must find new solutions to old problems. Moreover, as President Obama recently declared, we must “innovate our way out of this recession.” The countries with policies that foster innovation today will be home to tomorrow's multi-billion dollar industries that create millions of new jobs. In the past, it was assumed that the U.S. would be the leader. Not anymore. The innovation engines in China, India, South Korea, Taiwan and Europe are being boldly built up by their leaderships, and we are being directly challenged.

An engine needs fuel and air to run. The "fuel" for our innovation engine includes early stage R&D and investment funding:  first, seed capital for an entrepreneur to investigate a solution; then venture capital to launch and grow a company; and finally a liquidity event, such as an Initial Public Offering (IPO) of stock or an acquisition by another company, that frees the entrepreneur to repeat the cycle. All three types of funding are now problematic for small companies.

Equally important is "air", the environment in which our innovation engine operates. Laws and regulations, including tax policy, accounting rules and intellectual property rights are critical to support an innovation-friendly environment. Unfortunately, government policies have not only failed to keep up with the realities of innovating in a global economy, they actively work against our ability to compete.

Over the past forty years, Silicon Valley has been a major force in US innovation, generating many new industries, including semiconductors, personal computers, “smart” drugs, internet search and solar power.   As members of that community, we want to tackle these challenges. We are accustomed to hard work and the risk of failure. Yet we are working in a changed environment that can be improved with basic adjustments in national policy and innovation leadership.

We are not asking for handouts or protection from global competition—far from it. Our nation's future depends on our ability to compete successfully in a flatter world. But we need better cooperation with the agencies that support and regulate innovation. We embrace our government’s renewed commitment to innovation.  Many of our entrepreneurial community’s innovation needs – distilled over several working sessions in recent months, and outlined in the attachments – are related to the topics also noted by the Tech CEO Council.  We ask for your specific attention to these needs, which seek a better understanding of and support for the entrepreneurial firms that are the main drivers of innovation today.

Signatures and Supporters
Topic Area 1 - Early Stage R&D
Topic Area 2 - Intellectual Property and Related Protections

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