In April 2012, President Obama signed the "Jumpstart Our Business Startups Act," (aka JOBS Act) The intent was to create jobs by making it easier for companies to raise money and go public.
"Going public is a major step towards expanding and hiring more workers," Obama said as he signed the JOBS Act into law. "Our job is to help our companies grow and hire. That's why I pushed for this bill." The other main proponent of the law, House Majority Leader Eric Cantor, R-Va., added: "By increasing access to capital and reducing onerous regulations, entrepreneurs and small business owners will have more ability to take risks, grow and create jobs."
Wow something the dysfunction junction agrees upon! How did that happen in the Nation that anything he can do I can do better by not agreeing with it and not doing anything better.
And now comes the Twitter IPO. This only seems to verify what the real intent was, financial obscurity. And they have the best bank in which to accomplish this - Goldman Sachs.
But they are not the only one. My personal favorite was one of the Activist/ReActivist Shareholder Twins business which falls into this veiled category.
Bloomberg News reported, the JOBS Act in reality is a lot less appealing than it sounded in theory :
Billionaire hedge-fund manager Daniel Loeb's Third Point Reinsurance Ltd., which has no staff in the U.S., said it can limit financial disclosure after a public offering because of rules promoting domestic job creation.
Third Point Re is an "emerging growth company" under the Jumpstart Our Business Startups -- or JOBS -- Act, according to filings for the planned initial public offering.
Okay, so in this case a billionaire's reinsurance company is limiting its financial disclosures, while creating no jobs.
And that is a consistent pattern with regards to the JOBS act and its overall failure to create jobs or even IPO's. Here we are a year later with little to few jobs or even solid IPO's.
And the Twitter scam, oops, I mean plan is very similar. But this is again the ever increasing influence of the Tech Sector and particularly with this President who is very much a product of this STEM focus as the savior to the economy. Obama is clearly a technocrat in every sense of the mold. And this is why our education to our immigration policies seem to be centered around the needs and wants of the land of milk and honey also known as Silicon Valley.
There was an interesting article here about the JOBS act with regards to the Twitter IPO. And of course there is more revelations about the incest that describes the reality behind funding and support in the technology sector as I have shared below. It is not what you know its who you know. . The ideal concept and supposed ethic of this sector which professes Meritocracy is no different than anyone else. In other words "like" hire "like."
And this un-revelation (as the issue was discussed on CNN a year ago with regards to Black innovators in the Valley) and of late the articles about how Harvard is teaching women to "lean in" of course teaching men how to lean out not a curriculum issue. But at least we are starting to actually "discuss" the issue, which probably means nothing but it is better than nothing when it comes to the truth behind the OZ curtain that the tech sector hides behind.
The old canards of we have college dropouts as evidenced by the "dropouts" of Bill Gates (Harvard), Dead Steve Jobs (Reed) and the most recent Mark "hoodie" Zuckerberg (also Harvard) as the impetus behind the push to in fact encourage kids to drop out and tune into the Valley speak as evidenced by another tech sector scion, Peter Thiel, and his bullshit. I love that he is "teaching" at Stanford, perfect! It is akin to Teach for America Startup 2.0 where kids of Ivy League pedigree get more access to network better and if it doesn't work out they can easily go back to the halls from which they came, get that degree of prestige and get a job to match. Getting however that access to those halls to those kids who would actually benefit from it, no. So much for changing the world but keeping the status quo, yes.
I have written to the affect bias has with regards to the legal world and of course medicine so why would technology be any different. In fact what I have found is that as those who rise up the proverbial food chain, the worse the bias. Why? I think it is about self preservation and validation. And no where do I see it more in the modern age but in the modern economy.
Meritocracy is just another word in which we have nothing to lose or gain as it all stays the same.
Silicon Valley start-up world, pedigree counts
By Sarah McBride
Thu Sep 12, 2013 6:55pm EDT
(Reuters) - When asked to name the most notable rags-to-riches entrepreneur that his firm has funded, venture capitalist Ben Horowitz doesn't hesitate: Christian Gheorghe, a Romanian immigrant who came to the United States without speaking English, and rose from limo driver to founder of a business-analytics company, Tidemark.
It's an impressive tale that encapsulates the way Silicon Valley likes to think of itself: a pure meritocracy; a place where talent rises to the top regardless of social class, educational pedigree, race, nationality or anything else.
Indeed, the notion that anyone with smarts, drive and a great idea can raise money and start a company is a central tenet of the Valley's ethos.
Yet on close inspection, the evidence suggests that the keys to success in the start-up world are not much different than those of many other elite professions. A prestigious degree, a proven track record and personal connections to power-brokers are at least as important as a great idea. Scrappy unknowns with a suitcase and a dream are the exceptions, not the rule.
A Reuters analysis of the 88 Silicon Valley companies that received "Series A" funding from one of the five top Valley venture firms in 2011, 2012, or the first half of 2013 shows that 70 were founded by people who hailed from what could be described as the traditional Silicon Valley cohort. (For a related graph that shows the Reuters analysis, click here )
That means the founders had held a senior position at a big technology firm, worked at a well-connected smaller one, started a successful company already, or attended one of just three universities - Stanford, Harvard and Massachusetts Institute of Technology.
The analysis, which looked only at Northern California companies funded by Accel Partners, Andreessen Horowitz, Benchmark Capital, Greylock Partners and Sequoia Capital, generally supports academic research showing that tech entrepreneurs are substantially wealthier and better educated than the population at large.
It also echoes the perception of even successful entrepreneurs who come from outside the preferred cohort.
Michal Wroczynski, founder of Fido Labs, believes coming from Poland cost him many extra months when he was fundraising in late 2012 and early this year.
"It would be great value to be from one of the big universities with a big strong network," he says.
There are, of course, plenty of stories of outsiders who climb to the top in Silicon Valley. Oracle Corp co-founder Larry Ellison grew up in middle-class surroundings in Chicago, and started Oracle with $2,000, mostly his savings. Apple co-founder Steve Jobs grew up in Silicon Valley, but came from a working-class background.
In recent years, a new wave of start-up incubators - led by Y Combinator - have given entrepreneurs from varied backgrounds a helping hand, including advice, introductions and seed money. The incubators seem to find a broad range of founders.
"We connect a lot of previously unconnected startups," said Y Combinator co-founder Paul Graham. "But a lot of the startups we fund are from Silicon Valley and are already well connected."
Of course, well-connected people often merit every penny of their funding — after all, even connected people typically also need smarts and drive to get a prestigious degree or land a good job at a respected company.
But venture capitalists emphatically reject the notion that connections count in the start-up economy, and dispute Reuters' methodology in categorizing their investments.
"I don't really think that a kid coming out of Harvard or MIT is actually well connected," Horowitz said by email, citing examples such as Facebook founder Mark Zuckerberg. Though he attended Harvard, Zuckerberg was unconnected until entrepreneur Sean Parker sought him out and made Silicon Valley introductions for him, Horowitz said.
Attending a top school, or performing well at a hyper-competitive company such as Google, can serve as a marker that the person can compete globally, Horowitz said, but it isn't necessary to succeed. Venture investors are backing people as much as ideas, he added, and thus have no choice but to insist that the entrepreneur have a certain level of qualification or reputation.
"When Andreessen came out of the University of Illinois, he didn't know anybody, but people knew his work," Horowitz said, referring to partner Marc Andreessen, who co-founded Internet pioneer Netscape Communications.
"Silicon Valley has this way of finding greatness and supporting it," says Greylock's Joseph Ansanelli. "It values meritocracy more than any place else."
Still, unknowns from modest backgrounds, like Andreessen and Jobs, are relatively rare among today's Valley start-ups. Much more typical are entrepreneurs such as Instagram co-founder Kevin Systrom, who followed a well-trod path from Stanford to Google to start-up glory.
Ross Levine, a professor at the Haas School of Business at the University of California, Berkeley, said entrepreneurs are more likely than salaried workers to come from high-earning, well-educated families.
As children, entrepreneurs lived in households where the average income in 1979 was $88,711, compared with $67,548 for the population as a whole, according to Levine's study of the National Longitudinal Survey of Youth.
"Who's going to be an entrepreneur?" he asks. "It's going to be a rich person, to a much higher degree."
Venture capitalists often say they look for companies via people they know; Sequoia partner Mike Moritz described that process in July when talking about the firm's investment in grocery-delivery company Instacart.
"Like a lot of the investments that have come our way, a friend of a friend talked to us about it, and told us about it, and encouraged the founder and the CEO to come and chat with us," he said. "One thing led to another."
Those who successfully break into Silicon Valley say networking their way to that one introduction is critical.
Suhail Doshi, co-founder of analytics company Mixpanel, shows how it can be done. While a student at Arizona State University, he engaged an engineer at the start-up company Slide in a series of conversations on Internet Relay Chat, a message service favored by serious techies.
He parlayed that into an internship at Slide, which is run by angel investor and PayPal co-founder Max Levchin. After a stint at Y Combinator, he was able to raise over $10 million from top-tier VCs. The relationship with Levchin, who also invested, was crucial.
"He's a super awesome mentor to me," says Doshi. "He's been instrumental in every fundraising round."
Levchin himself broke into Silicon Valley as a recent graduate of the University of Illinois in large part due to an encounter with entrepreneur and investor Peter Thiel. They went on to found PayPal.
"The founders, they just figure it out," says Greylock's Ansanelli about unconnected entrepreneurs. "They hustle, they network."
Yet not everyone has to hustle in quite the same way. Brit Morin raised $1.25 million for her craft-oriented Web site, Brit & Co., months after its 2011 launch, and another $6.3 million earlier this year. Investors included Founders Fund, which was co-founded by Thiel, an early backer of Facebook, where Brit Morin's husband Dave was an early employee. He later launched the social-networking site Path.
When asked whether her connections got her the cash, Morin said: "I don't think any VC is going to invest in a company that doesn't have a clear business strategy."
The case of Gheorge, the Romanian immigrant, is also instructive. He immigrated to the United States in 1989. By the time Horowitz met him, he had built a database-marketing firm and a predictive-analytics firm, both later acquired; worked as chief technology officer at software company SAP; and served as an entrepreneur in residence at white-shoe venture firm Greylock.
In other words, he was very much a known quantity.
The son of a Bucharest lathe operator, Gheorge believes his first big break came from far outside Silicon Valley. While working as a limousine driver in New York in 1991, he told a client, Andrew Saxe, that he liked to code.
Saxe, who ran a marketing company, invited Gheorghe to come for a formal interview and hired him. Eventually, the two built software-marketing business Saxe Inc. Saxe died in 1999.
"The first venture investment was Andrew investing in me," he said, adding he is not sure that would have happened so quickly in the Bay Area.
"I feel this expectation, that you have a certain background," he said about Silicon Valley. It's an expectation he did not feel in New York.
(Reporting By Sarah McBride; Editing by Jonathan Weber, Frank McGurty and Leslie Gevirtz)