The good piece of news is that lawmakers are now looking at providing some regulatory relief for smaller companies. "US Senators Jim DeMint (R-South Carolina) and John Barrasso (R-Wyoming) have introduced the "Startup Expansion and Investment Act," which would exempt companies with less than a $1 billion in market capitalization from the reporting rules set by the 2002 Sarbanes-Oxley Act. "Our bill will chip away at the burdens faced by American businesses-particularly for new innovative companies who want to expand and create jobs," Barrasso said in a statement. "For far too long, American free-enterprise has been squeezed and shackled by heavy-handed government regulations and mandates. In this troubled economy, government needs to move aside and let the job creators do what they do best-invent, invest, and grow."
This is absolutely critical because new research from the Kauffman Foundation reveals that job growth in the United States is driven entirely by startups, not established firms. This study reveals that from 1977 to 2005, startups created an average of 3 million new jobs per year while existing firms were responsible for 1 million net jobs lost. Or, as the Kauffman Foundation put it: "Without startups, there would be no net job growth in the US economy."
At the same time, there is further research showing that start ups are staying smaller. They're not growing as much, which means fewer jobs are being created.
With US unemployment at high levels, the US start up culture needs every bit of help it can get. This is a good start.