Unleashing the Power of Venture Capital for a Thriving America
Non-Silicon Valley ventures also tapping into venture capital funding sources
Venture capital (VC) is the lifeblood of innovation, reshaping industries and fostering economic growth across the nation. From the West Coast to the East, VC-backed companies are transforming the way we live, work, and connect, with groundbreaking companies like SpaceX, Airbnb, Waymo, Cava, and Instacart leading the charge.
To unlock the true potential of the burgeoning entrepreneurial economy, we need more VCs working hand-in-hand with founders in every nook and cranny of the country. This partnership will extend beyond funding, offering crucial mentorship, advice, and long-term support to ensure the success of innovative startups nationwide.
In 2024 alone, more than 3,600 venture funds operated outside the traditional strongholds of California, Massachusetts, and New York. States like Texas (475 funds), Florida (313), Colorado (185), and Ohio (139) are evidence that the VC-fueled innovation economy is thriving, spanning the continental United States.
The impact of VC can be seen in tech hubs from Pittsburgh to Des Moines, to Austin, as ventures capital continues to fund the next generation of cutting-edge tech companies, nurturing local job creation, and shaping the future of entire industries.
Embracing the Innovation Wave
The economic impact of venture capital is impossible to overstate. Over the past few decades, VC-backed companies have been responsible for many of our nation's technological leaps, while simultaneously driving job creation at a massive scale. From defense tech to healthcare, biotech, telemedicine, personalized medicine, cryptocurrency, and blockchain, VC-backed startups are redefining America's economic trajectory and reinforcing our global dominance.
Defense Innovations for a Secure Nation
In the realm of defense technology, VC is spurring the development of cutting-edge security solutions to enhance America's defense capabilities. From autonomous drones to AI-driven cybersecurity, venture-backed startups are ensuring that the U.S. maintains its edge in an ever-evolving threat landscape. Fortem Technologies, a VC-backed defense startup based in Utah, is developing technology that uses radar, AI, and autonomous drones to intercept hostile drones and protect critical infrastructure, all made possible by venture capital.
Healthcare Advancements for a Healthier Nation
VC is accelerating breakthroughs in the healthcare sector, including biotech, telemedicine, and personalized medicine, leading to improved patient outcomes, expanded access to care, and lower costs. VC-backed startups are developing innovative treatments for diseases like cancer, Alzheimer's, and rare genetic disorders. Minnesota-based HistoSonics is pioneering a noninvasive tumor treatment using sound waves instead of surgery, a potentially life-changing advancement propelled by venture capital.
Financial Innovation Transforming Traditional Banking
In the realm of cryptocurrency and blockchain, VC is driving a wave of financial innovation, upending traditional banking, increasing transparency, and extending digital financial services to underserved populations. The rise of decentralized finance (DeFi) and blockchain applications is only possible because of the investment ecosystem provided by venture capital. ConsenSys, based in Texas, is helping developers connect their apps to blockchain networks, contributing to a decentralized economy.
These examples are just a fraction of the more than 58,000 U.S. venture-backed businesses active at the end of Q1, demonstrating the widespread reach and impact of VC investments.
Protecting the Carried Interest Incentive for Continued Success
VC is a proven engine of innovation, economic growth, and job creation—but the sector is facing risks. Congress is contemplating changes to the tax treatment of carried interest, a lynchpin of the venture capital model. Carried interest is the share of profits that investors receive when they help turn a startup into a successful company, taxed at a lower capital gains rate that reflects the long-term nature of their investment and the associated risks.
Maintaining the current tax treatment of carried interest is crucial, as raising taxes would discourage patient, high-risk investment, harming economic growth and innovation across the country. Besides investors, altering carried interest taxation would jeopardize the venture capital ecosystem as a whole, slowing progress in industries critical to America's future competitiveness, such as life-saving medical innovations, next-gen defense technologies, and more.
America is locked in a fierce technological competition with China. Protecting the entrepreneurial ecosystem fueled by venture capital is essential to staying competitive on the global stage and supporting continued innovation across the nation, from Idaho to Florida, and everywhere in between.
[1]https://www.washingtonpost.com/outlook/2015/12/05/its-time-end-carried-interest-tax-loophole/
[2]https://www.pgpf.org/blog/post/carried-interest-tax-loophole-explained
[3]https://www.nytimes.com/2018/03/12/business/stocks/carried-interest-tax.html
[4]https://www.barrons.com/articles/trump-tax-plan-would-end-carried-interest-tax-break-51507298247
[5]https://taxfoundation.org/carried-interest-tax/
[6]https://www.heritage.org/economy/report/carried-interest-legislation-harms-american-companies-workers-and-taxpayers
- The lifeblood of innovation, venture capital (VC), is shaping the economy, with VC-backed companies like SpaceX, Airbnb, Waymo, Cava, and Instacart leading transformative changes in various sectors.
- To foster economic growth across the United States, more venture capitalists are required to partner with innovators, offering funds, mentorship, and long-term support to startups nationwide.
- In 2024, over 3,600 venture funds were operational outside of traditional strongholds, extending VC support beyond California, Massachusetts, and New York, into states like Texas, Florida, Colorado, and Ohio.
- Venture capital's contribution to technological advancements is evident in the development of cutting-edge tech companies, spurring local job creation and reshaping industries.
- VC-backed companies in defense technology are enhancing America's defense capabilities, such as Fortem Technologies, which develops technology to protect critical infrastructure using radar, AI, and autonomous drones.
- The healthcare sector, including biotech, telemedicine, and personalized medicine, is witnessing breakthroughs thanks to VC investment, with firms like HistoSonics pioneering non-invasive tumor treatments using sound waves.
- Venture capital is driving financial innovation by boosting the adoption of cryptocurrency and blockchain, upending traditional banking, increasing transparency, and expanding digital financial services.
- ConsenSys, a VC-backed startup based in Texas, is playing a significant role in connecting apps to blockchain networks, contributing to a decentralized economy.
- Maintaining the current tax treatment of carried interest, a key aspect of the VC model, is essential to encourage patient, high-risk investment, essential for the growth and innovation across the nation.
- Protecting the venture capital ecosystem, including the carried interest incentive, is crucial for America's competitiveness, aiding in the development of life-saving medical innovations, next-gen defense technologies, and more.
