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Two Parts of the Startup 3.0 Act That Will Help Small Business

This morning, I will be part of a panel discussion to educate congressional staffers on the merits of the Startup 3.0 Act (H.R. 714/ S. 310) that was introduced in both the House and Senate this February. Startup 3.0 has many provisions that will help small businesses. The panel is being hosted by the House Small Business IT Caucus and includes:

  • Doug Humphrey, Serial Entrepreneur
  • Raj Khera, CEO, MailerMailer (me)
  • Morris Panner, CEO, DICOM Grid.com
  • David Pauken, CEO, Convoke Systems
  • Cynthia Traeger, Director, Founder Institute of DC
  • Lamar Whitman of CompTIA as Moderator

My fellow panelists will go into their own experience as business owners and focus on different parts of the proposed legislation. I am focusing on two of the areas: 1) the elimination of country quotas for H1-B visas so that we can bring more skilled workers to build new products and 2) the ability to offset R&D expenses against payroll tax liability via a tax credit. Both of these provisions in Startup 3.0 will help small businesses get the talent and retain more cash to develop innovative products.

The hearing is at 11:00 a.m. today in the House Rayburn Office Building and is open to the public. Below is my testimony:


House Small Business IT Caucus - Congressional Panel on Startup 3.0

Raj Khera
June 28, 2013

House Small Business Committee Hearing Room, Rayburn Bldg

Good morning everyone, my name is Raj Khera. I’m the CEO of a marketing software company called MailerMailer, located in Rockville, Maryland. This is my third business – like several of my colleagues on this panel, I’ve built and sold other technology companies before and have experienced first hand the challenges that Americans face when building a business.

I was excited about several of the provisions in the Startup 3.0 Bill because they will really help spur innovation and remove some of the obstacles that entrepreneurs face. The really strong job growth in our economy comes from companies with products and services in high-demand sectors.

Many of you may know that there is a severe shortage of qualified engineering talent in the United States.  We have to find the talent somewhere or we can’t grow. A few years ago, I needed to hire an engineer with a unique skill set. After looking for a while in the US, I finally found someone who lived in England. It was April and the quota for all H1-B visas had been filled. Lucky for me, his person wasn’t from a country whose quota limits fill up so fast that you have to enter a lottery just to see if your candidate can even come here. I still had to wait until October before the next fiscal year’s quotas were opened up before I could bring over my new employee. That was extremely frustrating. It delayed the build out and deployment of our new product line. The Startup 3.0 bill removes country quotas so employers like me can get the talent we need to build the products that help grow our GDP. There are thousands of companies just like mine and in the same situation.

Another one of the provisions of this bill is a tax credit of up to $250,000 of R&D expenses against payroll tax liability. I’ve used previous R&D tax credits that were available against income and they have helped my company build new products that have been very successful in the marketplace. The Startup 3.0 proposed tax credits against payroll tax liability are unique because most startups don’t have income, but almost everyone has payroll. This provision will help startups keep more cash on hand to build new products.

I strongly recommend that you help to get this bill passed because it is going to enable small businesses to create more American jobs and provide incentives for more investment into American startups. Thank you.


Update: pictures from the event… well attended by congressional staffers with lots of good questions.

House Small Business IT Caucus

Raj Khera - presenting to congressional staffers

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