SSTI Digest

In 2017, 122 companies filed Regulation A+ (Reg A+) offerings and raised over $236.5 million collectively, building upon the early promise shown when the rules went into effect two years ago. Reg A+ is a less complicated and shorter process for a company going public than the traditional initial public offering (IPO) process. The 2017 Reg A+ offerings averaged $18.2 million each, according to a recent report by Amit Singh from the Stradling law firm, and include both Reg A+ Tier 1 and Tier 2 offerings. However, as the SSTI Digest recently reported about  equity crowdfunding, startups and other small businesses have been slow to adopt this new source of capital.

The majority (75 percent) of all high school students were enrolled in a STEM course during the 2015-16 school year, according to the newest Civil Rights Data Collection (CRDC). For the first time, the CRDC includes new categories of data on STEM course taking, showing that some higher level math and science courses are offered at fewer high schools. That figure is even more pronounced at the approximately 5,000 high schools with high black and Latino enrollment (i.e. schools with more than 75 percent black and Latino student enrollment), where higher level mathematics and science courses are offered at a lower rate than the overall population of all high schools.

One of our partner organizations, the National Association for Community College Entrepreneurship (NACCE), recently opened their registration for their annual conference, NACCE 2018 The Entrepreneurial Ecosystem Revolution. The conference features keynotes from engaging entrepreneurs that have innovated in areas ranging from 1980’s rock and roll memorabilia to one of the co-developers of Amazon’s Alexa. Panels and breakout sessions featuring NACCE members from across the U.S. will share best practices for entrepreneurial leadership and experiential teaching across academic disciplines.

One of this year’s most important books on economic development tells a story that those involved in the field need to know and might not necessarily want to hear. In Coping with Adversity: Regional Economic Resilience and Public Policy, authors Harold Wolman, Howard Wial, Travis St. Clair, and Ned Hill seek to understand why some metropolitan areas are resilient in the face of economic hardship, while others are not. This commentary will summarize the authors’ findings and provide insight into what their findings might mean for the broader economic development community.

Last year, the National Institutes of Health (NIH) considered multiple strategies to address the implicit bias toward researchers with ‘proven track records’ during its existing grant making process. While previous research studies have found similar concerns about the current grant making process, two recent studies from the University of Cambridge propose that grant-making organizations consider implementing a lottery system to allocate grant awards to alleviate bias and improve outcomes.  

In 2017, 25.7 percent of all angel capital group deals went to a founding team with at least one female founder, up from 17.0 percent in 2016, according to the Angel Resource Institute’s (ARI) HALO Report: 2017. The report also found a sizeable increase in the number of deals made for companies that included at least one minority female founder – 5.5 percent in 2017 (1.0 percent in 2016).

The HALO Report: 2017 is based upon data collected from angel groups as well as individual angel groups across the country. To collect the data, ARI uses both survey responses and PitchBook online resources. In total, the study’s database includes 3,617 deals made by angel groups. ARI, however, excluded deals with first-time investment rounds greater than $4 million to avoid skewing the data. ARI also excluded deals made by individual angel investors outside of groups in 2017 – they report that 1,499 such individual angel investor deals were made.

The new four-year strategic plan for NASA provides a foundation to return to the moon “for long-term exploration and use” as well as creating a base for “eventual crewed missions to Mars and potentially beyond.”

NASA is restructuring the agency to align with the administration’s focus on space exploration. As part of the restructuring addressed in the plan, the former Space Technology Mission Directorate (STMD) and advanced technology work in the Advanced Exploration Systems program will be merged into a new Exploration Research & Technology organization. Additional restructuring options also are being reviewed, including creating two new exploration-focused mission directorates and eliminating the current Human Exploration and Operations Mission Directorate (HEOMD) and STMD structure, or an option to create a single “super” exploration-focused mission directorate by pulling together all the exploration-focused areas in the current HEOMD and STMD organizations. A decision on a new model is expected this spring.

As hearings for the annual National Defense Authorization Act (NDAA) begin this week, a report by the “Section 809 Panel” is likely to influence the bill’s acquisition provisions. The panel, authorized by the FY 2016 NDAA, has emphasized efforts the Department of Defense can implement to work better with innovative small businesses, including simplified contracting and strengthening SBIR. Congress proved receptive to the panel’s interim report — acting on all three recommendations in the FY 2018 NDAA — and proposals from the first of three final reports will be discussed as the FY 2019 bill advances.

While nearly all (98 percent) of U.S. public school districts offered career and technical education (CTE) programs in the 2016-17 school year, such programs differed between rural and city districts and faced barriers to participation from both the districts and students. Rural districts are much less likely to have work-based learning activities as a part of their CTE programming, according to a new report from the National Center for Education Statistics.

After more than a decade of supporting regional economic development efforts, philanthropic communities in Southeastern Michigan and Northeastern Ohio are changing course to focus on economic inclusion and broader prosperity efforts. In the wake of the Great Recession, the Cleveland region’s Fund for Our Economic Future (The Fund) and Metro Detroit’s New Economy Initiative (NEI) became notable examples of philanthropic partnerships that emphasize economic diversification through innovation, entrepreneurship, and workforce development. Both initiatives recently unveiled plans for their next phases.

Startups and small businesses raised $30 million during the first year of equity crowdfunding (also known as regulation crowdfunding or Reg CF) with an average of $289,000 raised in a successful campaign, according to a recent report published by the Small Business Administration’s (SBA) Office of Advocacy. While equity crowdfunding hasn’t been the game changer that it was touted to be by many of its advocates, several studies indicate that the first year plus shows promising findings for this new source of startup capital authorized by the Jumpstart Our Business Startups Act (JOBS Act).

In February, SSTI highlighted several state-led efforts to address the rural broadband gap, which affects more than 30 percent of rural America who currently lack access to adequate broadband service. The states’ efforts should help revitalize rural communities by aiding small business formation and manufacturers’ expansion, and improve educational achievement/workforce training for local citizens. As some state legislative sessions wrap up, several more governors and state lawmakers have created new initiatives to address this significant issue. Alabama, Colorado and Washington provide the most recent examples of new commitments, including some reversing bans on public broadband provision when the private market fails to deliver.