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How the Infrastructure Bill Will Affect VC Funding for Businesses

The $2 Trillion Infrastructure Bill, also known as The American Jobs Plan, aims to fund a variety of projects. Roads, bridges, railways, telecommunications networks, clean energy, and even venture capital (VC) funding for businesses are all included. Although many find the details of venture capital firms funding confusing, and while the bill has yet to be finalized,  potentially $31 billion for new VC funding will become available.

How exactly will venture capital firms funding be included and what does this mean for businesses?
Here’s an excerpt from The American Jobs Plan Fact Sheet put out by the White House:

President Biden is calling on Congress to invest $31 billion in programs that give small businesses access to credit, venture capital, and R&D dollars. The proposal includes funding for community-based small business incubators and innovation hubs to support the growth of entrepreneurship in communities of color and underserved communities.”

The goal of this funding is to re-invest in the American manufacturing industry by creating a “national network of small business incubators and innovation hubs.” Although the bill has yet to pass, this formal statement makes it clear that the small business economy in the key to the success of this plan.

What does this mean for small- and medium-sized businesses?
Our country requires significant investment to maintain and improve infrastructure. Increasing funding for businesses helps keep the necessary services alive. Now that so much of our infrastructure has or will have connectivity capabilities, we need to make sure that we’re funding innovative ideas to propel us forward. These innovations often come from small- to medium-sized startups. The plan aims to make sure that the ideas that can fuel the future of the nation and keep us competitive on the world stage are found and funded. However, funding these types of projects can be costly, so having funding available through government incubators and hubs could provide the needed resources for some of the most high-tech solutions. 

How do VC funding and technology advancements fit into infrastructure?
Typical infrastructure projects such as roads and bridges are just a few of the projects proposed within the bill. Consider your drive to work or the grocery store. It’s not just the asphalt that plays a major role in creating the road you’re on. There are sensors placed into the ground at intersections, lights are connected to optimize flow and there are even some cameras. When repairing or building new roads, we need pavement of course, but we also need lighting, equipment, security to protect the equipment overnight, and cleaning services to remove debris when the project concludes. Transportation, clean energy, building materials, and internet connectivity are all key infrastructure components to keeping our cities and towns vibrant and productive.

Innovative ventures
As we await details about how the funding will be dispersed, this portion of the bill is a bright spot for small- and medium-sized businesses looking to take their ideas to the next level. Are you wondering how you can position yourself to be a recipient of VC funding as a government vendor? Add yourself to our newsletter so that you can stay in the know.

If you’d like to learn more about the bill, and how it will affect your business, check out this webinar with DemandStar’s own Steve Tran answering questions including about VC funding.