CAE’s Origin Story
It began with the financial crisis of 2008. John Dearie had a ringside seat to that historic incident because he was serving as policy director at the Financial Services Forum. In his role, he was closely involved in the policy response that became the Dodd-Frank Wall Street Reform and Consumer Protection Act.
But even after that legislation was implemented and the economy began to revive, it became clear that the recovery was not nearly as robust as it should have been. The economy’s growth remained below 2% in the spring of 2011, and unemployment exceeded 9%, despite the aggressive policy response by Washington and the Federal Reserve.
At that time, new research began to yield major insights into the vital importance of entrepreneurship. Spearheading this work was the organization that has done so much for the causes I care about: the Kauffman Foundation, with Carl Schramm as president and CEO and Bob Litan as vice president of research and policy.
The research revealed three significant facts:
- Startups drive economic growth. New businesses are the disproportionate source of innovation in our economy—new products, services, and ways of doing things. And innovation fuels economic growth by improving productivity (as demonstrated by the economist Robert Solow in the 1950s).
- Startups account for virtually all net-new jobs. Established companies create jobs, but they also shed jobs as they mature, incorporate capital and technology, and focus on what they do best. In fact, Kauffman Foundation research has shown that firms older than five years, in aggregate, on a net basis, shed about a million jobs each year.
- US entrepreneurship had been declining for decades. Ian Hathaway and Bob Litan showed that entrepreneurship had been in decline in virtually every US metro area and across industry sectors since the late 1970s.
Listening to Entrepreneurs
All these findings raised a crucial question: Why was US entrepreneurship—so vital to the health of our economy—in decline?
No one seemed to have the answer.
So John Dearie and his colleague Courtney Geduldig spent the summer of 2011 traveling the country and conducting roundtables with more than 200 entrepreneurs in a dozen cities, asking them directly, “What’s in your way?” What they heard became a book and a bright idea.
CAE Was Born
John realized, “We needed an organization in Washington to educate policymakers about why entrepreneurship is so important to innovation, economic growth, and job creation, why entrepreneurship was in decline—and what to do about it.” He believed that if policy action could reverse the decline, we could return to the kind of economic growth and job creation the country needed.
He left his role as acting CEO of the Financial Services Forum to found CAE in July of 2017.
The Power of the Network
CAE is made up of many exceptional contributors who not only connected me with the organization initially but who have supercharged my knowledge and abilities ever since. It was Ian Hathaway who first brought CAE’s good work to my attention. Brad Feld was another link—I’d been involved with Techstars for many years. And of course, I knew of Bob Litan because of his influential work with the Kauffman Foundation.
Today, as part of CAE, I’m plugged into a network of extraordinary experts who support my endeavors in capital innovation and science-based technologies, including Steve Case, Gina Raimondo, Kristina Johnson, and Eric Smith.
This is a beautiful aspect of the entrepreneurial world. All of us feel responsible for connecting one another, because we know the power of relationships over time. Together, we create a flywheel of support, collaboration, and potential for US entrepreneurship—and the economy it stokes.
The INVEST Act: CAE in Action
An excellent example of the policy work to which CAE contributes is a major legislative package called the INVEST Act, comprising twenty-two bills summarized here, which passed the House of Representatives in a strong bipartisan vote of 302–123 on December 11, 2025.
While CAE works on the full range of issues important to American entrepreneurship, the INVEST Act focuses on expanding access to capital. The act will significantly improve capital formation and access to capital for new and small American businesses by:
- strengthening and modernizing public capital markets;
- expanding capital alternatives for new and small businesses;
- facilitating broader geographic access to capital; and
- broadening opportunities for more Americans to participate in and support the innovation economy as investors.
One aspect of the INVEST Act that CAE worked especially hard on for several years is the Improving Capital Allocation for Newcomers (ICAN) Act. The bill addresses the problem that the distribution of equity capital in this country is currently highly concentrated, with only about 2 percent going to women founders, and less than 1 percent going to entrepreneurs of color.
CAE understands that who gets capital depends a great deal on who is doing the investing. Investors tend to invest in people who look like them, have similar life experiences, and who are launching businesses investors relate to—a phenomenon known as “homophily” (liking of the same). Getting more capital to women founders and entrepreneurs of color, therefore, requires more women investors and investors of color.
The ICAN Act accomplishes that diversification of the investor base by doubling the number of permitted investors in private investment funds up to $50 million, thereby reducing the size of the average investment in funds, allowing more accredited women investors and investors of color to participate in funds that invest in startups.
Entrepreneurs and fund managers of color have told John and his colleagues: “If this legislation is enacted, it will change the world for us.”
Changing the world: a big goal, but an achievable goal—and one that all of us at CAE share.
To learn more about John Dearie, the Center for American Entrepreneurship, and the many ways CAE works to help new businesses, visit StartupsUSA.org.