Removing barriers to entrepreneurship: Insights from Victor Hwang

Removing barriers to entrepreneurship: Insights from Victor Hwang

Entrepreneurship can act as a catalyst for economic growth, innovation, and personal empowerment. Yet, as Right to Start founder Victor Hwang highlights, there are numerous barriers for entrepreneurs. 

Victor joined economic development leaders from Hennepin County, the State of Minnesota, and Edina at a recent event hosting by Elevate Hennepin during his cross-country road trip exploring entrepreneurship and barriers for business owners. Addressing these barriers is critical to fostering a robust entrepreneurial ecosystem.

"Business is hard," Victor said. "Every year, roughly 10% of businesses fail, and after five years, about half remain standing." 

He stressed the need to lower failure rates and increase the chances of success by reducing friction and removing obstacles that entrepreneurs face.

That’s the goal of Right to Start, an entrepreneur-support organization that works to create legislation that empowers more people to start and grow their own businesses. 

“Almost every policy issue affects entrepreneurs. So, it's not just taxes or red tape–which people talk about a lot–but it's also capital access, health care, childcare, education, government contracting, economic development, everything is involved in entrepreneurship,” said Victor. “Reduce all the friction points; make it easier for people to do that.” 

His approach includes simplifying all the complex activities necessary to start and grow a business, such as: access to capital, providing legal guidance, and increasing government support for new businesses. What each business community needs, however, is unique.

In Minnesota, city, county, and state governments find solutions in support of entrepreneurs. Minnesota supports entrepreneurship with various different methods, such as the Small Business and Innovation Office inside the Minnesota Department of Employment and Economic Development (DEED). Here in Hennepin County, there is another layer of collaborative support through Elevate Hennepin, which Victor called out as unique.

“Very few counties do that,” said Victor. “Just know how rare that is and how special it is, and the resources they provide you are very significant.” 

The interagency collaboration here is remarkable, demonstrated by the fact that eighteen cities in Hennepin County invest in Elevate Hennepin. Victor went on to say entrepreneurs thrive in environments like Hennepin County, which are rich in essential resources, mentorship, and robust networks. 

Why focus on entrepreneurship? 

Victor said there are a lot of reasons to support entrepreneurs, but points to the community impacts above all. 

“Entrepreneurs lift up community wealth,” said Victor. “For every 1% increase in entrepreneurship, average household income in an entire county goes up by almost $500. They fight poverty. For every 1% increase in entrepreneurship in a state, the poverty rate goes down by 2%. So entrepreneurship is very powerful.” 

Hennepin County’s Community and Economic Development Director Patricia Fitzgerald added perspective from Hennepin County’s focus on entrepreneurs. One benefit: expansion of good jobs. Small businesses and new businesses account for nearly all net new job growth and about 20% of gross job creations. 

“Local businesses do better at retaining their employees, and they also help create places that attract and retain our workforce overall,” said Patricia. “Research also shows that small firms pay low- and medium-skilled workers better.” 

Over time, however, fewer people are pursuing entrepreneurship. Victor said since there are half as many people starting and growing their own businesses today than there were in the 1970s. By removing barriers and showing a clear path to entrepreneurship, more people will be emboldened to chase their dreams. 

“Reduce all the friction points; make it easier for people to do that,” Hwang reiterates. “By removing barriers and fostering a supportive entrepreneurial ecosystem, we can revitalize entrepreneurship, drive economic growth, and ensure that the American dream remains accessible to all.” 

Read more about Victor’s work and the priorities of his organization at Right to Start