As this year comes to a close, it's clear that 2021 was transformative in more ways than one.
Let's jump in.
2021 marked a transformation in the way Americans make money.
In 2018, more than 53% of American workers were employed by a business with more than 500 employees. (One century earlier, that would have been nearly unthinkable.) Just a few years later in 2021, more than 38 million Americans quit their jobs.
All told, it looks like about 25% of American workers quit their jobs in 2021.
At the same time, new business formation broke records in 2021. While it’s too early to say what types of businesses those are, it stands to reason that some of those new businesses are going to need startup capital.
Whether you call it the Great Resignation or the Great Formation, Americans want to work differently in the future than they did in the past.
What does that look like? In all likelihood, workers are demanding (or designing for) more creativity and more freedom in their lives.
With so many reconsidering what they want from their work, it’s no surprise that 2021 also saw rising interest in the so-called “Creator Economy.”
According to some estimates, there are more than 50M people who are working as creators. About 2M of those people are professional creators.
This network of independent creators, supported by a fast-growing set of software and resources, is evolving. In the first phase, individuals with a following became influencers. Now, some influencers are operating more like small businesses or even media outlets.
On a parallel path, leaders in the startup and entrepreneurial space have made serious moves towards increasing access to entrepreneurship.
Becoming a founder is tough, but staying one is tougher. As the data shows, it remains difficult to become a founder.
However, support does exist. From purpose-driven VCs to startup studios, there are a whole host of organizations dedicated to supporting individuals from all walks of life on their entrepreneurial journey.
This is part of a shifting focus towards democratizing opportunity.
Striking out on your own requires both knowledge and resources. Knowledge is abundant and democratized; knowing how to apply that knowledge is critical for success. Google is ready to serve up an answer to any question a founder could ask. Dedicated communities, like social media and founder Slacks, provide the expertise and support to help founders apply that knowledge correctly.
On the resources side, cash remains king. While perks and discounts are great, living life and growing a business costs money. To democratize opportunity, it’s critical to reduce the barriers to accessing capital.
Traditional capital providers have strict requirements for the type of person or business they will fund. For example, banks typically lend to individuals with consistent income and high credit score, or a business with hard assets or 2-3 years of operating history. VC firms are looking for businesses that fit a specific growth opportunity and potential exit path.
But today’s economy is moving towards newer, more fluid types of business. The lines between an individual and a business are blurring, with the rise in one-woman software businesses, one-man media companies, or one-person consultancies. This calls for a new type of capital to support these individuals directly as they start building their enterprise.
It’s time. And we think that new entrepreneur funding approaches, like the Convertible Income Share Agreement, are ready for primetime.
Want to learn more?