President Obama this week laid out a new rural jobs initiative, which included a doubling of Small Business Administration funds for rural small businesses over the next five years (via the SBIC program) and expanding job training services to 2,800 U.S. Department of Agriculture field offices. It also had a third component, of particular relevance for Term Sheet:
SBA and USDA will launch a series of Rural Private Equity and Venture Capital conferences nationwide to provide a platform for connecting private equity and venture capital investors with rural start-ups.
This is one of those things that sounds good on paper, but I have no idea how it will actually work in practice. For example, will the conferences be in rural areas, or in existing private investment centers like Silicon Valley and Boston? If the former, how will SBA and USDA attract investors? If the latter, who will pay for rural entrepreneurs to attend (travel, lodging, etc.)?
Moreover, let’s imagine that someone in Nowhere, Oklahoma has a great IT startup idea worth funding. Isn’t it most likely that the investor will try luring them to Palo Alto and, if so, how does that support rural job growth? Even today’s most successful “off-the-beaten path” startups – e.g., Angie’s List in Indianapolis and LivingSocial in Washington, D.C. — still can’t be categorized as rural. Or will all of this be centered around small-time SBICs?
So I reached out to USDA and SBA, but haven’t yet received answers. USDA said the times and locations are yet to be determined, while SBA hasn’t yet found anyone for me to speak with. My hope is that, when I do get the call, it comes with practical answers that could help begin chip away at a very serious problem.
UPDATE: The SBA has provided the following comment:
“SBA and USDA plan to leverage our existing network of relationships. As the events are planned, we will work with our expanding network – which is growing regularly through Startup America and White House Business Council roundtables – to ensure the right people are in the room.”