Intel Capital and IBM are investing a combined US$350 million in a new effort by President Barack Obama's administration to encourage entrepreneurs and mentor new businesspeople.
The White House announced the new Startup America initiative, a national campaign to promote entrepreneurship, on Monday. IBM will invest $150 million in the private-sector-led effort and Intel Capital will invest $200 million, in addition to $200 million that Intel has already pumped into its similar Invest in America Alliance, launched a year ago.
"Intel is dedicated to creating a culture of investment in the United States that supports American startups and the country's future competitiveness," Arvind Sodhani, president of Intel Capital and Intel executive vice president, said in a statement.
Startup America, with more than $400 million in funding commitments from private businesses, will focus on advising entrepreneurs, providing seed investments in new companies and expanding programs in schools and colleges that help students start their own company, White House officials and other participants in Monday's launch event said.
New businesses in the current economic environment need access to investment capital, said Austan Goolsbee, chairman of the White House Council of Economic Advisers. Other nations are working hard to build their entrepreneurial cultures, he said.
"If you just go get the Fortune 500 list, it's quite clear that some of the biggest employers in the nation ... started in somebody's garage," Goolsbee said. "It's the creation of new ideas that keep America the premier economy in the world. We want to do Startup America because everybody deserves at least one chance to change the world."
Entrepreneurs create jobs and help expand the economy, Obama said in a statement. "Entrepreneurs embody the promise of America: the belief that if you have a good idea and are willing to work hard and see it through, you can succeed in this country," he said. "That's why we're launching Startup America, a national campaign to help win the future by knocking down barriers in the path of men and women in every corner of this country hoping to take a chance, follow a dream, and start a business."
The initiative has close ties to the U.S. technology industry. Steve Case, co-founder of AOL, will serve as chairman of the initiative, and Hewlett-Packard and Facebook are among the supporters. The initiative wants to celebrate entrepreneurs and educate the public about the benefits of new business ideas, he said.
Tuesday's launch event featured several U.S. entrepreneurs, including 18-year-old college student Zoë Damacela, who started her own custom clothing business when she was 14. Damacela, who lived in low-income housing and was homeless at times as a child, sold her first dress for $13, she said.
Damacela took a class from the Network for Teaching Entrepreneurship at her Chicago school when she was 16, she said. "They completely changed my life," she said. "[The program] taught me how to market my products, how to price my products, which was most important thing for me, and they also provided me with amazing opportunities and mentors."
She had three employees by her senior year in high school, she said. "I had an intern before I even went to my senior prom," she said.
It's important for the U.S. to support young entrepreneurs and provide them education, she added. "Not only did it allow me to have that financial independence and bring myself out of poverty, but it also helped me to create jobs for my community," she said. "It's so important to focus on this untapped resource of young people who have these amazing ideas."
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is firstname.lastname@example.org.