The future of startups is in America, and our veterans are well poised to lead the way in entrepreneurship. But they’ll need the support of nonprofit leaders across the country in order to succeed.
America’s military forces are creating, operating, improving on and training others in the world’s most innovative and transformative technologies, including virtual reality, artificial intelligence, robotics, avionics, nuclear technology, cyber, satellites, urban air mobility and even gaming technology. If technology is the backbone of tomorrow’s businesses, there is no one more capable of leading the entrepreneurial revolution than our former service members.
America has a long-standing tradition of veteran entrepreneurship. In fact, it's said that half of our country’s World War II veterans became entrepreneurs. Today, self-employed veterans are likely to have served in Vietnam, some of them having served alongside my father.
Post-service entrepreneurship among newer veterans is seeing a resurgence. Nearly 10% of all U.S. businesses are majority-owned by veterans, according to data from the U.S. Census Bureau’s Survey of Business Owners. The same survey found that veteran-owned businesses employ over 5 million people and bring in over $1 trillion in revenue. Every year, a quarter of a million military personnel leave the service and enter the workforce. According to the U.S. Small Business Administration, one in four are interested in starting their own business.
Why Veterans Make Ideal Entrepreneurs
In many ways, America’s military is a school in entrepreneurship. We teach service members leadership, drive, grit, creativity, stamina and perseverance in the face of high complexity and risk. When many people think of military service, they imagine people firing weapons, driving tanks and flying jets. But these tasks represent a fraction of what service members are doing.
Our military members routinely work in fields including IT, cybersecurity, human resources, mechanics, strategy, communications, manufacturing, engineering, law and health science. These kinds of careers have direct civilian carryovers and make these men and women eminently qualified to start their own businesses. It’s one of the reasons veterans tend to out-earn nonveteran entrepreneurs.
Barriers To Success
Here’s what many veterans don’t have: formal business training, financial acumen and capital. On one hand, America’s service members could be considered financially secure; they have healthcare, housing and a reliable paycheck. But they’re certainly not rich. Many of them are single-income households, and many are living paycheck to paycheck. Finances are usually the biggest stressor for veterans after the stressor of combat. For some, finances weigh heavier even than deployments.
These financial worries keep many who are transitioning to the civilian sector from pursuing their dreams of owning their own businesses. Finances are a strain felt by 65% of all entrepreneurs, who say they weren’t fully confident they had enough money to start their business. And 93% said they “calculated a potential run rate of shorter than 18 months,” according to research by Kabbage. When you consider that veterans often have a harder time getting financing than non-vets, it’s not surprising that many are discouraged.
How You Can Help
We need to do more to help our country’s veteran entrepreneurs so they can focus on their businesses instead of worrying about how they'll feed their families. Nonprofit leaders can use their resources to help vets with what they need most: financial education and assistance, mentorship and business training.
This is why, after 36 years of military service, I have decided to transition to a new role of service as president of the PenFed Foundation, dedicating my efforts to helping expand the financial opportunities for America’s veteran entrepreneurs. As the philanthropic arm of one of our nation’s largest credit unions, the PenFed Foundation is well equipped to use its resources, networks and experiences to give back to the veteran community.
Through our Veteran Entrepreneur Investment Program, partnerships with schools such as Tuck School of Business at Dartmouth and collaborations with nonprofits such as Bunker Labs, Vets in Tech, Hivers & Strivers and many others, we are helping hundreds of veterans a year fulfill their dreams of owning their own businesses by helping them write business plans; connecting them with mentors, partners and legal advisors; and making financial investments in majority-veteran-owned businesses through convertible notes. Now, we need other nonprofits around the country to unite with us behind the common goal of helping our veteran entrepreneurs achieve their business goals.
This approach works. Our first investment, True Made Foods -- founded by a former Navy pilot and a father of four -- sells healthy condiments in over 2,400 stores nationwide and saw a 120% compound annual growth rate on gross sales in 2018. We also recently announced a new investment in Honest Soul Yoga, founded by an Air Force veteran. Her company employs mostly military spouses as yoga instructors, helping them supplement their spouses’ income. This is an important value for veteran entrepreneurs since veteran-owned businesses are 30% more likely to employ other veterans.
Our veterans need investors who will back their businesses, and nonprofit leaders can help find them, whether it’s by establishing their own veteran investment programs or using their networks to connect veterans with capital. Nonprofit leaders, who often run their organizations with strong business acumen and employ skilled professionals in finance, marketing, public relations, operations and technology, can help veterans gain the business skills and resources they need. We need executives who will step up to be mentors. And we need leaders to leverage their social networks to direct consumers to buy veterans’ products and use their services.
When I was in the service, I saw the entrepreneurial spirit alive in many military families. I knew people who started their own catering businesses, drove for Uber, planned events and photographed weddings. These businesses did well. It makes sense, given that our nation’s two most trusted institutions are the military and small businesses.
If we want the U.S. to maintain its lead as one of the top countries for entrepreneurship, nonprofit leaders need to use their unique skill sets to support veteran businesses, the future of America’s startups.
