The Big Story: R&D tax credit changes create tax bill for startups. Startups and other companies are facing higher taxes this year after a provision from a 2017 tax law went into effect recently. The law, the Tax Cuts and Jobs Act (TCJA), triggers a change to how the research and development (R&D) tax credit operates. Unless policymakers step in, startups and small businesses will have to weather the blow to their cash flow and may consider limiting future R&D costs. This could ultimately result in an overall reduction in innovation in the U.S., slowed economic growth, and decreased ability for our innovation ecosystem to compete with other countries.
Startup News Digest 03/24/23
The Big Story: New research shows state privacy patchwork costs startups hundreds of thousands. Startups spend hundreds of thousands of their limited resources on privacy compliance, much of which goes to duplicative activities that don't further users' privacy, according to a report Engine is releasing today. The report, Privacy Patchwork Problem, chronicles the steps startups are taking to protect the data of their users and enumerates the costs, burdens, and barriers startups encounter—which reach into the hundreds of thousands of dollars. It underscores the need to give for a federal privacy framework that creates uniformity, promotes clarity, and accounts for the resources of startups, while creating consistent rights for their users located in every state across the country.
Startup News Digest 03/10/23
The Big Story: Broad, diverse coalition underscores importance of Section 230. This week, Engine joined more than three dozen public interest organizations, academics, free expression advocates, industry associations, and companies in a letter highlighting the value of Section 230 in enabling users, community building, and expression online. The letter was sent to members of the Senate Judiciary Subcommittee on Privacy, Technology, and the Law ahead of a hearing Wednesday on Section 230, a foundational Internet law that enables platforms of all sizes to host and moderate user content without risking ruinous liability.
38 Groups From Public Interest To Industry Sign Letter Supporting Section 230 Ahead of Hearing
Washington – As the Senate Judiciary Subcommittee on Privacy, Technology, and the Law plans a hearing Wednesday on the law that enables online services to host user-generated content, diverse organizations from academics to industry to public interest groups sent a letter to Subcommittee leaders. The letter acknowledges that Section 230 is the legal framework that enables anyone to create spaces online where user communities can gather and share content, to the benefit of Internet users and online expression.
Startup News Digest 03/03/23
The Big Story: Congress looks to build momentum on privacy legislation. This week, a congressional subcommittee held a hearing exploring federal data privacy legislation, a top priority for startups. The hearing comes amid the emerging mosaic of state privacy laws that can create confusion and duplicative costs for startups. The hearing, held by the House Energy and Commerce subcommittee on Innovation, Data, and Commerce, focused on building upon legislation that passed through the committee last Congress and explored several issues important to startups in the privacy debate, including whether to preempt state laws, whether to allow private rights of action, and how to properly scope requirements for small businesses and startups.
Startup News Digest 02/17/23
The Big Story: Section 230, privacy, encryption in crosshairs at kids safety hearing. The Senate Judiciary Committee held a hearing Tuesday on protecting children’s safety online, where lawmakers suggested changes to several issues important to startups, like Section 230, data privacy, and encryption. The wide-ranging proposals appear conceived with the largest tech companies in mind, but they would affect all Internet companies, especially startups. The hearing comes amid efforts from policymakers at all levels of government aimed at safeguarding young Internet users that could carry unintended negative consequences for startups without necessarily protecting children.
Startup News Digest 02/10/23
The Big Story: Hearings cast spotlight on capital access obstacles. Lawmakers heard from entrepreneurs and investors this week as they examined key issues impacting startups’ ability to access capital. The House Financial Services subcommittee held two hearings covering multiple legislative proposals, including efforts to expand the pool of accredited investors and changes to the structure of certain investment funds. Those changes, if enacted, would bring much needed diversity to the startup ecosystem’s investor pool and boost funding opportunities for underrepresented entrepreneurs.
Startup News Digest 02/03/23
The Big Story: Startup policy priorities for 2023, and how to get involved. This week, Engine released its first-ever Startup Policy Playbook, to help give members of the startup ecosystem—startup founders and employees, investors, and support organizations—an overview of the policy conversations happening this Congress and how they can get involved in amplifying the startup voice this year.
Startup News Digest 01/27/23
The Big Story: U.S. moves forward on AI policy, resources for startups. This week, two federal entities released materials to bolster research and responsible development of Artificial Intelligence, which are or will be made available to startups. The National AI Research Resource Task Force released its final report to the president and Congress recommending the creation of a National AI Research Resource (NAIRR), and that startups be primary users of that resource. And the National Institute of Standards and Technology (NIST) released the Artificial Intelligence Risk Management Framework, a voluntary guide for companies—including startups—as they develop AI technologies. Both developments were spurred by the National AI Initiative Act of 2020 which passed as part of the National Defense Authorization Act that year.
Startup News Digest 01/20/23
The Big Story: Supreme Court hears about the value of Section 230 for startups, Internet creators. The Supreme Court received dozens of briefs this week in support of Section 230, including one Engine signed explaining how the law supports startups and small Internet platforms and another that Engine helped organize about the ways Internet creators benefit from Section 230. The briefs come as the court considers Gonzalez v. Google and the applicability of Section 230—the 1996 law that enables Internet platforms to host user content without fear of ruinous litigation.
Creators defend key Internet law to the Supreme Court
Internet creators, storytellers, educators, authors, artists, and more joined together in defense of a foundational Internet law currently being challenged in front of the Supreme Court. Through its Digital Entrepreneur Project, Engine helped organize a first-of-its-kind brief filed with the court today, arguing that Section 230 has helped make it possible for anyone, anywhere in the world to launch and grow a business and build an audience online.
Statement on Engine filing Section 230 briefs with Supreme Court
"Section 230 has led to so much of the creativity and innovation on the Internet today. While it's easy to focus on how the law impacts large companies, every startup that hosts user content and every creator and digital entrepreneur that uses the Internet to share content and build an audience needs Section 230. Their perspectives should be front and center for policymakers and the court as it considers this case."
Startup News Digest 01/13/23
The Big Story: President Biden’s new tech priorities, and their impact on startups. President Joe Biden outlined a series of proposed changes to tech policy, including several likely to impact startups. In an op-ed this week, the president highlighted common ground with Republicans about perceived issues wrought by large tech companies, but each of the issues—data privacy, intermediary liability, and competition—also directly impact startups. As the president and Congress chart a path forward, it’s important they recognize how legislative decisions impact smaller businesses and startups when considering tech policy.
Startup News Digest 01/06/23
The Big Story: Congress off to rocky start while 2023 startup policy to-do list grows. The 118th Congress is off to a rough start this week as the House remains unable to move forward until they elect a Speaker, which doesn’t bode well for the long and growing list of startup priorities that Congress should act on this year. Those priorities, including key startup issues, like access to talent, broadband availability, and data privacy, must move through a Congress that appears as fraught as ever.
Startup News Digest 12/16/22
The Big Story: Independent contractor proposed rule risks startup growth. More than two dozen startups and ecosystem support organizations are warning policymakers about a proposed change that would impact access to flexible talent. In comments this week to the Department of Labor (DOL), Engine and 28 members of the startup ecosystem spotlighted the important role independent contractors play in the startup ecosystem and the likely negative impact on innovation if startups’ ability to hire contract labor is restricted.
Startup News Digest 12/09/22
The Big Story: Digital Services Taxes passed on to end users, including startups. Efforts to implement a global tax deal that would help avoid sector-specific taxes on digital services ran into additional roadblocks this week. The development follows new government reports confirming that the digital services taxes (DSTs)—which are often imposed upon large technology companies—are actually paid by their end users. As a result, startups, who often build their companies with services from other large tech firms, can face increased costs to building and growing their businesses.
Startup News Digest 12/02/22
The Big Story: Time is running out for Congress to save imperiled immigration program. As the end of the year quickly approaches—and with it, the end of this session of Congress—the future of the Deferred Action for Childhood Arrivals Program (DACA) remains uncertain. DACA recipients play a key role in the startup ecosystem as entrepreneurs and STEM talent. Without Congressional action, the future of the program will likely end up in the hands of the Supreme Court, which could invalidate the program. Senate Democrats are pushing to provide permanent status for Dreamers before that happens.
Startup News Digest 11/18/22
The Big Story: Online sales tax back in the spotlight with watchdog report. A government agency is recommending that Congress address the patchwork of state laws that govern online sales taxes, an issue that has burdened e-commerce businesses, including many startups. In a new report this week, the Government Accountability Office examined the “substantial uncertainty” and complexity of the current remote sales tax landscape and recommended that Congress work with states to streamline requirements and minimize the burdens currently imposed on businesses across the country.
Startup News Digest 11/04/22
The Big Story: Affirmative Action cases will impact innovation ecosystem. This week, the U.S. Supreme Court heard two cases that could upend race-conscious admissions policies used by many universities and alter the pipeline for STEM talent in the innovation ecosystem. Eliminating the ability to consider race in college admissions would have an outsized impact on on-campus diversity, the racial and ethnic diversity of many employers hiring college-educated talent throughout the country, and the makeup of the startup ecosystem and the breadth of innovation it produces.
Startup News Digest 10/28/22
The Big Story: Engine releases report on the role of acquisitions in the startup ecosystem. Engine, in partnership with Startup Genome, released a new report this week examining the role exits play in the startup ecosystem, highlighting the importance of exits via acquisition, and emphasizing the experience of founders that have had their companies acquired. The report—“Exits, Investment, and the Startup Experience: the role of acquisitions in the startup ecosystem”—should equip policymakers with a solid foundation from which they can advance pro-innovative policies that startups need to thrive.