Dashboard: Introducing America the Entrepreneurial

[Music] Welcome to another 21 Hats dashboard. I'm here with Victor Wong, who is founder and CEO of Right to Start, an advocacy group that works to expand entrepreneurial opportunity. Welcome back, Victor. Thank you, Lauren. It's always a pleasure to be here. Always a pleasure to have you. Uh Victor, uh this timing is great. You just attended a big important conference where you had a big important announcement to make. Tell us about it. We had it was a it was certainly a big and important conference. It was the global entrepreneurship congress just concluded this week in Indianapolis. It is the largest gathering of people who support entrepreneurship all across the world from um I think over 180 countries were there. Uh thousands of people from uh from all the continents of the world and uh it was amazing uh you this is actually where you get to see what's happening how how people are supporting entrepreneurs. We had ministers the economy you had people leading entrepreneurship in multiple states across the United States. You had people running organizations uh from universities, community colleges, schools, um uh uh governments. Uh it really was just a a grand um gathering of all the people who believe in the importance of entrepreneurship. And what was your big announcement? We just announced a national campaign in honor of America's 250th startup birthday, which is 2026. So, it's the startup birthday because America was the most courageous startup company idea in the world at the time and and still can be. And so, we we call this national campaign America the entrepreneurial. And it's a campaign to renew our nation's entrepreneur promise. It calls us to revive the original spirit of the country, the idea that anyone should be able to shape their own future and build something better for America. Uh this is a country that's been built by the builders, dreamers, starters, risktakers from all walks of life. And uh there's this sense today in the country that things are holding us back whether it's the barriers in entrepreneurship, outdated policies or a lack of civic support and that we should be able to do better. That we have to be able to allow entrepreneurs to help build a build a better America. Entrepreneurs are the ones that are building the future and we have to got to reignite that entrepreneur spirit across the nation. So with this national campaign, we're going to open it up so any individual or organization that wants to be able to participate in America's 250th startup birthday has a way to do so. And it's not just, you know, our leaders who are having parades and stuff which are going to be great. Uh but we ourselves are going to really make this a a celebration of the people, by the people, and for the people. How so? Tell me more about how the average person will connect with this. Well, if there we're going to have a number of different ways for people to get involved. If they want to um host, you know, a birthday party for America in their living room, they can do that. Or their neighborhood. If if teachers want to be able to share handouts in their classroom about the entrepreneur spirit and its importance to America, we'll have those. If college students want to start chap college chapters and clubs, we can do that. If people want to start their own clubs or if they run an organization that wants to be able to host something related to America's 250 and the entrepreneur promise of America, we'll have a pathway to do that. Uh we're going to build a network of of statewide coalitions all across the country in 50 states as part of this effort. Uh and so just if people go and sign up um on the website, it's at americatheontrepreneurial.org. Uh or if you can't find that immediately, go to writetostart.org and we'll it'll lead you over to America the entrepreneurial. uh there's going to be a way for everybody to join and we encourage them to do so. Do you have other organizations that are going to be working with you on this? Yeah, tons of them have already signed up. Uh we've got the very first signer up was the organization that runs the global entrepreneurship congress which is the global entrepreneurship network. They've already uh uh agreed with us on making their annual global entrepreneurship week events which are in November every year tied to uh America the entrepreneurial. Uh we've also got a number of organizations that have signed up. We've also got a national advisory council that we put together around this and just the very inaugural council includes some of the biggest names in entrepreneurship in America from Steve Casease uh the founder of AOL and now a venture capitalist uh the founders of several of the prominent startup companies in America from Dermalogica and Bonabos and Duo Security. uh to the heads of major foundations like the head of the Kaufman Foundation. We have exgovernors, Governor Asa Hutchinson, Governor Dirk Kempthorne, uh Brad Feld, the venture capitalist and entrepreneur uh involved. We've got a number of um uh leaders. Uh Brad Smith, the president of Marshall University and the former CEO of Inuit, Andrew Yang is involved, the um uh the politician and and citizen advocate uh and uh and others. It's really a a great network of some leading American um civic and political and business leaders and they're they they're all that passionately believe in this and it goes all the way from the left of the spectrum to the right of the spectrum. It's a heavily nonpartisan or transpartisan effort to pull Americans together. Is it primarily about reminding us of our entrepreneurial roots or are you also advocating for changes to uh reignite that entrepreneurial passion? It's all the above. It's about uh lifting up our consciousness. It's our it's our ability to tell the rest of America entrepreneurship matters to engage in that civic discussion to bring entrepreneurship front and center in the American debate. And we we strive for three key policy priorities. Uh one is to create a level playing field. So that could include streamlining regulations, reforming tax and procurement policies, improving access to capital, spreading entrepreneur knowledge, the second one, which includes expanding education, skills, tools, and information to help Americans start and grow businesses. And third, uh support entrepreneur households. Uh so the challenges that hit founders especially hard like health care, child care, home buying issues, income volatility, uh how do we make it easier for households everywhere to be able to do that? So we do have there's both civic awareness and activism but also trying to drive the change that makes it easier for people to start and build businesses. You recently wrote uh in your column for Inc. magazine about an effort to improve the delivery of capital to um to new businesses. Is that part of this initiative as well? Yes. Uh one of the things that we're really looking for is around expanding capital access. Uh, as many many entrepreneurs know, the capital system doesn't make it easy. It it helps. We've got a tremendous venture capital industry, but that venture capital really goes to less than 1% of the businesses, the ones that are truly scaling up and growing ridiculously fast, which is great. It's the envy of the world in many ways. Uh, and then banking only addresses something like se 16 17% of the companies out there because banks require uh they like years of financial statements. They need companies that have been in business for a long time. And they also look for collateral. They want you to put up put your home and your kids, anything else you own up as collateral and then you can borrow money, no problem. Right. Yeah. It's mortgage your house, mortgage your future, mortgage your business assets, but there's not not everyone can do that. And so that leaves out over 80% of the people starting businesses that are in the middle that don't fit either banking or venture capital. And so what I called for I recently wrote an Inc. column about this is to create a network of entrepreneur development banks. The same way that development banks of the 20th century like the World Bank and the Interamerican Development Bank etc. they built the infrastructure of the 20th century like electrical infrastructure um water lines uh even financial markets uh that that those were the infrastructure requirements of the 20th century. But the infrastructure of the 21st century are entrepreneur capabilities. It's our entrepreneur capacity. And so we need a new generation of development banks that actually does that. And so I wrote a column about how we can create entrepreneural development banks to actually build the financial infrastructure to build uh entrepreneural ecosystems today. And so I go through a number of different ideas from uh being able to look at alternative types of investment funds to being able to create secondary markets in micro lending uh to be to creating evergreen nonprofit organizational investment models uh to being able to jumpst start new fund formation in different markets all across the country. And so there's so much we could do around entrepreneural capacity development and there's models we can look to all across the world. Do you have you see any cause for optimism that you can light that fire and get people interested and actually make some changes? I feel like we can I think the country's at a moment. I think one of the things I found you I've taken three road trips across the country in the last three years. We've talked about them. I'm very jealous. Yeah. So, I've been I've been out there and I'll tell you, this country is hungry at the grassroots. They want ideas that re-energize us from the bottom up. Everything great in American history always happened from the bottom up. And people are looking for ideas. They're looking for activism. They're looking for ways that they make a difference. And what we're told about who we are at the national level is not actually what I found us to be the case at the local level. At the local level, this country is still very vibrant. anywhere you go, there is entrepreneurial energy that's happening. And um and so like in this inc column, I actually point to a number of examples of people that are doing exactly the things I think we should be doing more of from uh developing alternative capital models like revenue-based financing in places like Atlanta with collab capital uh in Kansas City with novel growth capital and San Diego with founders first capital. They're all creating alternative models that are neither venture capital nor banking and they're doing it in communities that are actually where the entrepreneurs are and where they're trying to to build what they're building. Um, so I just found this energy everywhere and I've talked about some of these ideas of how do we re-energize the entrepreneur spirit and can we use the 250th birthday of America to do that and the response has been extraordinary. People are hungry for it. They want to be able to participate. And we we took a a poll in a c in the country and we asked Americans uh this was a bipartisan poll by two of the top pollsters in the country, one on the left and one on the right. And we asked Americans, is it important to the future of the country that everyone has a chance to be able to start and build a business? 94% of Americans said it was. It's almost unanimous. uh entrepreneurship access to the entrepreneur dream is is a uniquely and bipartisan and American thing. It's deep in our DNA. It's core to who we are and it's one of these things just had it just need it's just waiting to be expressed. It's on the tip of our tongues waiting to come out. Could you maybe tell us a little bit more about one of those uh alternative I don't know um lenders or funds supplying equity capital. I I'm not sure exactly how they work, but is it at the experimental stage or is it actually working? Can you tell us more? Oh, sure. It's definitely working. It's Well, there's, you know, if you look at what banking is, it's uh where you get a loan and you make a set of fixed payments over time on paying it back. Venture capital, you get a piece of equity and you hope the company takes off and, you know, eventually sells or goes public for lots of money. But not all businesses are like that. Most businesses in fact are not like that. Most businesses in fact uh have especially in their early years they don't know what revenue is going to look like and and so a lot of um there's been a movement of new types of investors that will do uh they'll they'll invest in the company and will get paid back as a percentage of revenues. Uh for instance uh novel novel growth partners in Kansas City and Founders First in San Diego. They'll give a loan to a company and instead of saying you need to make fixed payments, they'll say pay us back as a percentage of your revenues. If you make more money that month, you pay us more. If you make less money that month, you pay us less. And at some point, you pay it all back and it caps out. So, it's not a perpetual royalty. You pay up to a certain amount of the original in investment or loan or whatever we gave you and then we'll be able to take that back. Uh and so that kind of model has been extremely successful because um it allows the flexibility that that meets entrepreneurs where they are where if they're more successful, they can pay back more. If they're less successful, they don't have to pay back as much. What's interesting is how um uh regulators often have a they get confused by that because they get scared. They're thinking, how can you take so much money from someone this month and not the next month? And so a lot of state regulations get in the way of that and have caused problems in that because they're so used to the old model which is fixed payment plan and and it's so it just shows that we've got a a civic and policy system that's kind of last century and we've got innovators and entrepreneurs and innovative investors that are trying to do things differently and they run into these types of roadblocks. For someone who's listening to this and whose ears just perked up, are these alternative uh lenders? Are are they operating around the country or are they constrained geographically to their own location and are they looking for spec specific types of businesses or uh will they consider anything? Uh well um Novel Growth Partners has a platform and anyone in the country can go on there and apply and they get responses. they'll get your response like really fast within minutes uh because they have a lot of automated mechanisms to to crunch the numbers. Um uh Founders First operates in a network of cities across the country. Uh I don't remember all the cities offhand but it's spread all over the country that even though they're based in San Diego and uh but a lot of uh entrepreneurs may already be familiar with some of these working capital lines based on revenue. um PayPal as one example that actually does a working capital line where they uh loan uh entrepreneurs money based on their revenues and they get paid back over as a percentage of revenues until they pay it back to a certain point. And so bigger platforms like PayPal do it, but also more innovative uh uh nimble platforms like uh Novel and Founders First do it as well. So there's there's a mix of different providers doing these types of things. I know that PayPal uh they've already been able to use that type of model. their working capital model and it's it's already helped invest uh I think over $30 billion into entrepreneurs in America that way. There is also another kind of alternative lender which has become somewhat infamous for charging outrageous uh interest rates for not being fully upfront about um annual percentage rates. Um, is there a bright line between the companies you're describing and the bad actors I'm referring to? Uh, there are well, a lot of it has to do with transparency. uh how much do you disclose upfront about the terms? And there are clearly terms. It's a bit of the wild west right now on in the financial tech world uh on how you know businesses get capital. And so there are uh companies that you know will loan money to entrepreneurs and deep in the fine print will be excru excruciatingly painful payoff terms or trigger mechanisms that cause you to lose your company upon defaults. Um and those are terrible. I think you want to stick with the well-known trusted actors that are out there that are able to abscri ascribe to a set of principles. Um there there are a number of different efforts to try to create transparency around that. The u the small business borrowers bill of rights is one such effort to create transparency around lending. Um but uh you know you can be a great uh provider of capital and and there's a lot of different ways to do that and uh and you just got to be careful out there because unlike consumer finance where there's lots of protections that are built into the law in business finance it's pretty wild west. There's a lot that's going on and so one has to be careful. I think you know with the um with the bad actors a lot of oftentimes they are preying on companies that are desperate that need a quick infusion of cash because something has gone wrong and they're willing to accept terms that they probably know they shouldn't. I think you're describing lenders who are trying to help a growing business that is um maybe figuring out what's going to work but not in desperate shape. Uh well, you know, in the early years, you know, if you're running a a little retail business, you don't know where it's going to come from. Even a software business when you're, you know, one month you could be doing well, next month you could be doing badly. There's just so much fluctuation in in business, especially in the early years when you're trying to learn maybe even what the the life cycle of your your your revenue model looks like. Uh so, uh what we need is uh right now the the capital markets are the equivalent of like an ice cream store with two flavors. Uh, it's like you get your venture capital and your banking, but entrepreneurs come in so many different sizes and shapes that you really need you need all the different flavors of ice cream to fit all the different types of children you have coming in the store. Uh, and that's uh and so we can't two flavors of ice cream are not enough. That should be our our our rally line. Victor, I always learn new stuff talking to you. I always get uh energized talking to you. I appreciate you're sharing this with us. Tell us again if somebody's interested in learning more about the 250th anniversary campaign, where should they go? America the entrepreneurial.org. Uh and you can also uh look at righttostart.org. Right tostart is is leading the campaign and you can sign up to either or both. Uh and we'd love to have you there. And as as the year goes on, we're going to roll out more and more and give you more and more ways to get active. right now. Just sign up and we're getting ready to push out a a campaign soon that will uh help people in telling their entrepreneur stories. So, that's going to be coming out soon as well. Victor Wong is founder and CEO of Right to Start. Thanks for taking the time, Victor. Thank you, Lauren. You do amazing work at 21 Hats. I'm so proud of watching you go and thank you for all the great work you do on behalf of entrepreneurs. I really appreciate that. Thank you. Have a great week, everybody. [Music]