Global Entrepreneurship Institute

Case In Point: Steve Case and America Online

Steven Case created America Online from scratch into the world’s largest online service by making the power of the Internet available to the average consumer. He describes his source of pain. “In 1982, I bought my first computer and wanted to hook it up and be part of this online world, and I went to great lengths to make it happen.

It took many months, and hundreds of dollars to get the modem to work with the software to work with the cable to work with the computer to actually connect to this world. So it was very frustrating.”

In 1985 at a time when General Electric launched Genie online services, and IBM and Sears together launched Prodigy online services, Case launched Q-Link, an online service based in Virginia. In the early 1990s he watched the development of modems and believed that faster modems would become commoditized in the near future which would mean more potential customers for his online service.

In 1991 he changed the name of his business to America Online (AOL) and he took the company public in 1992. By fall 1994 they had one million users plugging into the Internet through AOL. Between 1992 and 1999 AOL added more than 13 million subscribers. That is more new subscribers than The New York Times and The Washington Post together have added in the past 50 years.

In 2003, America Online, now the Internet division of AOL Time Warner, is the world’s largest Internet access provider (with more than 35 million subscribers using its AOL online service). Nearly 400 million emails are sent and received daily through the AOL network; 13.4 billion Web pages served up daily, and more than 2.1 billion instant messages are sent daily.

A legal theory of economic growth that details how effective property, contract, and business laws help to unite capital and ideas.

Solomon’s Knot, a book by Robert D. Cooter and Hans-Bernd Schäfer and published by Princeton University Press, is the newest release in the Kauffman Foundation Book Series on Innovation and Entrepreneurship. Authors Cooter and Schäfer propose a legal theory of economic growth that details how effective property, contract, and business laws help to unite capital and ideas. They also demonstrate why ineffective private and business laws are the root cause of the poverty of nations in today’s world. Without the legal institutions that allow innovation and entrepreneurship to thrive, other attempts to spur economic growth are destined to fail.

The authors explain that sustained growth depends on innovation, whether it’s cutting-edge software from Silicon Valley, an improved assembly line in Sichuan, or a new export market for Swaziland’s leather. Developing a new idea requires money, which poses a problem of trust. The innovator must trust the investor with his idea and the investor must trust the innovator with her money. Cooter and Schäfer call this the “double trust dilemma of development.” Nowhere is this problem more acute than in poorer nations, where the failure to solve it results in stagnant economies.

Cooter and Schäfer propose a legal theory of economic growth that details how effective property, contract, and business laws help to unite capital and ideas. They also demonstrate why ineffective private and business laws are the root cause of the poverty of nations in today’s world. Without the legal institutions that allow innovation and entrepreneurship to thrive, other attempts to spur economic growth are destined to fail.

Robert D. Cooter is the Herman F. Selvin Professor of Law at the University of California, Berkeley. His books include The Strategic Constitution (Princeton). Hans-Bernd Schäfer is professor of law and economics at the Bucerius Law School in Hamburg, Germany, and professor emeritus at the University of Hamburg. His books include The Economic Analysis of Civil Law.

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SOURCE: Princeton University Press, Kauffman Foundation

When Ronald Reagan took the oath of office on January 20, 1981, the country was experiencing some of bleakest economic times since the Depression. The American dream had been restored with the help from Mr. Jack Kemp. I had the pleasure of meeting and interviewing Mr. Kemp a few years ago.

Jack Kemp, who died May 02, 2009, was remembered for his commitment to free-market principles, known as entrepreneurial capitalism, that transformed the world in the 1980s.

entrepreneurial capitalism: private capital, investing in private start-ups, with potential for a viable harvest

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Running a major tech company has to be one of the harder callings in the world of business. Not only do you have to be an extremely innovative individual, but you also need the innate ability to be a leader and extract the most out of your employees. Here is a list of the standout winners and losers of the various tech executives in history. Some were endlessly successful innovators, and others could never quite rally the troops enough to get the job done.

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SOURCE: SoftwareAdvice.com

Expanding overseas can help companies to find new revenue, but it can also be a challenging process. In addition to communication difficulties, expansion might also present banking, taxation and regulatory issues, experts say. “You must have a lot of patience, understanding, a strong will to succeed and a good exit strategy in case things don’t go as planned,” said Darron Burke, who expanded his coffee business overseas.

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SOURCE: Fox Business News

Discussions About The Venture Capital Industry

Marc Andreessen, co-founder of Netscape, vividly describes an insider’s view to the venture capital industry’s food chain: The best venture capitalists (VCs) can see ahead and are willing to think they can fix things, put the management team together, do all this stuff. Any huge success story like Netscape or Apple is like a sausage factory. Everybody likes to eat sausage; no one likes to see how it gets made. These things are all sausage factories inside.

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If you have a merchant account, it will impact you too. (PayPal, Google Checkout, Authorize.net)

IRS will not require reconciliation of gross receipts and merchant card transactions on business tax returns

On February 10,2012 the Internal Revenue Service (IRS) amended its informational webpage on credit card reporting requirements to announce that the IRS will not require reconciliation of gross receipts and merchant card transactions on Forms 1120, “U.S. Corporate Income Tax Return,” and other business income tax forms. The Housing Assistance Tax Act of 2008 requires credit card companies to report merchants’ annual gross credit, debit, and third party network payment card transactions to the IRS using Form 1099K. Small businesses had expressed concern about the burdens and costs associated with reconciling discrepancies between their own sales records and the Forms 1099K issued by credit card processors. The February 10th IRS announcement directly addresses these small business concerns.

>>Learn More: IRS FAQs on New Payment Card Reporting Requirements