Have you ever considered the role of angel investors in fostering and supporting the entrepreneurial spirit in America? In this episode of "The Angel Next Door Podcast," host Marcia Dawood sits down with Congressman Seth Magaziner to explore the intersection of innovation, entrepreneurship, and public policy. Congressman Magaziner has served as Rhode Island's general treasurer and now represents Rhode Island in Congress, where he focuses on expanding economic opportunity, defending democracy, and promoting innovation. The episode dives into his journey, the importance of a strong social safety net for fostering innovation, and the need for pro-innovation policies to maintain American leadership in a global context. Through his experiences, he stresses the significance of advocating for working people and building the middle class, emphasizing the need for immigration reform and pro-innovation policies to drive economic growth. With a unique perspective on the intersection of public policy and entrepreneurship, this episode offers thought-provoking conversations on fostering innovation and maintaining America's position as a leader in global entrepreneurship and innovation. This episode is a must-listen for all those passionate about innovation and economic growth.
Have you ever considered the role of angel investors in fostering and supporting the entrepreneurial spirit in America? In this episode of "The Angel Next Door Podcast," host Marcia Dawood sits down with Congressman Magaziner to explore the intersection of innovation, entrepreneurship, and public policy. Congressman Magaziner has served as Rhode Island's general treasurer and now represents Rhode Island in Congress, where he focuses on expanding economic opportunity, defending democracy, and promoting innovation. The episode dives into his journey, the importance of a strong social safety net for fostering innovation, and the need for pro-innovation policies to maintain American leadership in a global context.
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Marcia Dawood
Perfect. Well, Congressman magaziner, welcome to the show.
Congressman Magaziner
Well, thank you very much for having me.
Marcia Dawood
So I am excited to talk to you today and find out all about the things that are going on, both in Rhode island and your view as a congressman. So previously, you served as Rhode Island's general treasurer under former governor, now secretary of Commerce Gina Romando. And I understand that she was the general treasurer before becoming the governor. And I understand that you had thought about governorship, but instead you came to Washington. So can you tell our listeners a little bit about your journey, what prompted you to run and some of the big similarities between being in the state and then also being in Congress?
Congressman Magaziner
Yeah, absolutely. I believe that government has the power and the ability to help expand opportunity and improve quality of life for people, but you need to have people in elected office who have the right priorities and the right values. And in particular, the part of Rhode island that I represent is a middle class, primarily blue collar community and made up of the kinds of people who really make our country's economy run, but too often are left out of the halls of power. And so what motivates me is being an advocate for working people, for building the middle class, and for helping those who are working hard to enter the middle class as well. As far as my journey, I'm a born and raised Rhode Islander. I started out my career, actually as a public school teacher. I taught third and fourth grade, elementary school, and then went back to school myself, got an MBA, worked in the financial services industry for a while. I worked actually for an ESG investment firm where we helped people invest money in ways that aligned with their values.
And on the side, I was always kind of involved in volunteering and advocating for causes that I cared about. I got involved in the marriage equality campaign in Rhode island early on as a volunteer. I got to know Gina Romundo before either of us were in politics. And when she decided she had been state treasurer, she decided to run for governor. I thought, wow, this is an opportunity to use my financial background to try to help people and to try to help families like those of the students who I had gotten to know when I was a teacher. So I was a state treasurer for eight years. Terrific job. Loved it.
The big highlights there were I worked with then Governor Romando to launch a statewide school construction initiative that is building, even as we speak today, building new schools all across the state of Rhode island. We started a clean energy infrastructure bank to build out clean energy projects across Rhode island. We started a program to help victims of domestic violence with financial support and helping people get out of bad situations and away from their abusers and set up financially, independently, and safely. And then as I started to think about what to do next, January 6 happened. And like everyone, I was at home kind of watching in horror as people stormed the capitol and really tried to upend our democracy and rob the american people of our right to choose leader and yeah. So, like most of us, I watched in horror as people were trying to upend our democracy and rob the american people of our right to choose our own leaders. And that was what motivated me to run for Congress. I still am focused very much on expanding economic opportunity and building the middle class. But in addition to that, defending our democracy is top of mind for me in Congress, as well. So that's my story. Those are my priorities, and I'm really honored to be in a place where I can try to make a.
Marcia Dawood
And, you know, you talk a lot about, and it's even front and center on your website about the american dream and the promise that hard work and perseverance, that each generation will build a better life for their kids than they had for themselves. But we know that no one reaches the american dream alone. So somewhere down the line, they had support. Somebody believed in them, helped them achieve their goals. And that understanding is a key principle of angel investing, especially here at the Angel Capital association. And angel investors promote growth success by introducing entrepreneurs to high value potential customers resources, counseling them through challenging times, helping them with credibility and market share. So Americans, at the core, have an entrepreneurial spirit that is fostered by those who have come before them. So, do you think the american dream is still alive and well today? Do you think it takes all of us to keep the american dream alive? What are your thoughts?
Congressman Magaziner
So, yes to all of that, and you're absolutely right. I mean, there are a lot of things that make the United States of America special and the greatest country in the world. But one of the key things that I think distinguishes us as a country is that we have been the preeminent source of innovation and ingenuity in the world for the last two centuries. We're not the biggest country, we're not the most populous country, but we are the source of a tremendous amount of innovation. And it's because we have well functioning capital markets, rule of law, and a culture that encourages risk taking. And even when you look at kind of our competitors around the know, China, Russia, et cetera, they're able to do a lot of things because they're large countries with significant resources and growing populations, but they have not been able to match our innovation and our pace of innovation. I do think that one of the things that you need to have in order to foster and maintain an innovative economy is a strong social safety net. Because it needs to be okay for people to fail.
Marcia Dawood
Yes.
Congressman Magaziner
As you and your members well know, the vast majority of new business ventures are not successful. And that's okay. That's part of the system, and that's part of how you have an innovative economy. But you need to have a society where if you're going to try something new or different, and you're going to strike out and start a business, start a venture, and you fail, it may not be pleasant, but it's not going to be catastrophic. You're still going to be able to go to the hospital if you're sick, you're still going to be able to stay housed and fed, and your kids are still going to be able to go to school. And so failure should be uncomfortable, but not catastrophic, because you want to incentivize risk taking. Right. And President Obama actually alluded to this in his second inaugural speech, which people may not remember, but he basically alluded to this, that in order for America's economy to continue to be innovative, we need to have a robust social safety net.
Congressman Magaziner
We also need to have an economy where nobody is left on the sidelines. And that is something that we need to continue to work at, I think, as a nation, because when people are living at the margins, they are less likely to want to do something innovative and take those risks. And so we need to try to foster a society where everyone's in the game. Everyone is able to lend their full talents and creativity and innovation to our economy. And that starts by making sure that everyone has an excellent education. It means having a robust social safety net. It means deconstructing the various barriers that have been built over time to keep categories of people from full participation in our economy. But if we do all of that, then I see no reason why, building on our existing strengths, we can't continue to be the most innovative nation in the history of the world as we have been for the last two centuries.
Marcia Dawood
I absolutely, you know, I am really interested in your work as you serve as a member of the House committee on Homeland Security. And I think that you may agree that one way to protect our Homeland is to ensure global innovation leadership, which is basically what we were just talking about, and that that remains dominant in the US. So every year, the ACA angels, we invest about a billion dollars into about 3000 ish startups. And these are credit investors who invest their own money. It's high risk, high growth, early stage enterprises. They fuel our economy. So despite the investment by angels in every american state, our foreign entities are investing heavily and they're trying to catch up. So to meet the competitive threat stemming from foreign adversaries, our membership would like to see pro innovation policies passed out of Congress.
So can you speak to your work on the committee here?
Congressman Magaziner
Yeah, absolutely. So I serve on two committees in Congress, the Homeland Security Committee and the Natural Resources Committee. And there is absolutely a lot of opportunity for innovation and improvements in technology to help us meet our national goals in both of those arenas. In the homeland security space, obviously, cyber is huge. Cybersecurity, the threats in cyberspace continue to become more advanced and multiply, and therefore, protection, both for government agencies, but also just for individual Americans, need to be robust as well. So there's a lot of innovation happening in the cyberspace already, but that needs to continue. But even in things like emergency management and border security, again, there's some very exciting technology that is being deployed. I was down at the southern border last year, and I saw the way that artificial intelligence, for example, is being used to help detect fentanyl and other dangerous substances coming through ports of entry in really sophisticated ways.
Congressman Magaziner
But it's always an arms race. Right. And so you have to continue to innovate in those sectors as well. And then obviously in natural resources, which is my other arena in Congress, on committees, we have to make this clean energy transition a reality. We have to do it in a way that's affordable. I think everyone who's watching and listening understands that. And so that's an area where we need to continue to innovate as well. And then just going back to our prior discussion about getting people off the sidelines and out of the margins of society and into the game, so to speak, we need immigration reform.
Congressman Magaziner
We desperately need real immigration reform because there are a lot of people who have talent and skills and ambition who see the United States as the best place to be innovators and to be workers. And our immigration system is failing us by making it more difficult than it should be for people to come here, work here, and do it through a process that is safe and fair and orderly. So we need real comprehensive immigration reform to help grow our economy and continue to innovate as well.
Marcia Dawood
I could not agree more. I'm married to an immigrant who came here for school and stayed and became a very productive member of society and a taxpayer.
Congressman Magaziner
And we make it much harder to do that than we should, as I'm sure you're well aware.
Marcia Dawood
Yes, very much so. There is a large tax package being considered in Congress right now, and earlier this year, a draft framework was released with bipartisan support by the House Ways and Means Committee chairman, Jason Smith and the Senate Finance Committee chair, Ron Wyden. So we were happy to see the deductions for research and experimental expenditures were included in that framework. And we'd also like to see the Small Business Investment act of 2023, which will expand section twelve two qsbs. For our listeners who aren't exactly sure what that means, I will put a link in the show notes to an episode where I had Tony Shipley come and talk all about twelve two and qsbs eligibility, but to making that easier and cheaper for businesses to raise capital and give businesses more flexibility in their financing options. We'd love to see that added to the eventual passed bill. So can you tell our listeners about the next steps in the congressional process in order to get this bill and a greater tax package signed into law?
Congressman Magaziner
Yeah, absolutely. So we just had a vote in the House last week, sorry, not even last week, two days ago on the tax bill. It includes some of what you mentioned, not all of it, but it does include longer depreciation for r and D expenses, which is a positive and will help foster, I think, innovation across industries. It also included an expanded child tax credit, an expanded low income housing tax credit. So it was a bipartisan tax deal that passed through the House overwhelmingly, I think something like 350 votes, very bipartisan. And now is in the Senate. I would say the prospect of getting something else added to that bill right now is pretty low because we're sort of in a rush to get this passed in time for the tax filing season coming up in the next six weeks. So I think it's probably too late to get anything else added to that package for this year.
Congressman Magaziner
The real focus is on getting it. What we've already passed through the House, through the Senate as well, and I'm hearing mixed things there. Even though House Republicans were very supportive of the bill, I'm hearing that Senate Republicans have some concerns, but I'm very hopeful that with the right pressure applied, we can get it through in the next couple of weeks in time for filing season. That'll be for this year, but then that doesn't preclude us from looking at additional reforms to encourage innovation next year and then in the years to follow. So stay tuned.
Marcia Dawood
Yeah, definitely. Well, and that goes into my next question, which this is an election year. Usually they are, let's just say, very colorful and very interesting. And this year seems to be no different, and you'll keep running to keep your seat as an incumbent. So with all this outside noise, what message do you hope to get across to your constituents, and what do you think will be some of the issues that you hope to focus on, even.
Congressman Magaziner
With all the say? I understand, of course, that ACA is a nonpartisan organization, and you don't get involved in electoral politics, nor should you. But I will just offer my perspective to those who are listening, which is that we talk about the United States being the best place in the world for innovation. One of the key reasons that that is the case is that we have rule of law. Right? And if someone files a patent here, we know it'll be honored. If someone is a taxpayer here, they're going to pay their fair amount and not be penalized for political reasons. We don't have the same level of political violence and instability that many other parts of the world suffer from. And so I do believe that Trumpism is a threat not just to our democracy, but to our economy and our spirit of innovation as well. Because when he starts throwing around language like being a dictator on day one and using the Department of Justice, threatening to use the Department of Justice to go after his political enemies, that really starts to feel like a potential breakdown in rule of law, like we see, unfortunately, in other countries around the world.
Congressman Magaziner
And that's bad for business, it's bad for the economy. It's certainly bad for maintaining a spirit of, you know, I'm supporting President Biden for re election. I'm obviously running for re election myself, because I think we do need to continue to have a rules based order in which the rule of law is followed and is not warped for the political agenda of one individual. And I do think that that's what's at stake in this election. So that's my pitch. I fully recognize that ACA is nonpartisan, as it should be. But I would just suggest to know when you're getting ready to head to the polls later this year, keep in mind that connection between rule of law and political stability and innovation and economic dynamism because that connection is hugely important and something that we need to protect as a country.
Marcia Dawood
And it sounds like you're going to continue to focus on expanding ways that we can have more innovation in the country and all the work that you've been talking about.
Congressman Magaziner
Absolutely. Yeah, that's right.
Marcia Dawood
Great. Well, Congressman, thank you so much for joining me today and being on the show. I really appreciate it, and we look forward to seeing what happens with you next in Congress.
Congressman Magaziner
Well, thank you very much. It's great to be here.