Americans love small business. Why don’t all entrepreneurs want to run one?

Elizabeth Gore cofounded a company to serve small business. But Hello Alice isn’t a small business itself — at least not in the way most would use the well-worn term.

Gore and cofounder Carolyn Rodz have raised at least $25 million in venture capital and have 50-something employees. They’ve attracted gobs of media attention since launching in 2017, and now boast that their fintech startup serves 1.5 million small business owners with capital and resources.

“The beating heart [of our economy] — your accountant, your child care, even your local doctor — are very small businesses,” Gore said.

Gore’s strategy makes good politics. Across the political spectrum, more Americans report more trust in small business than in religion, law enforcement or science. But many ambitious entrepreneurs bristle at the “small business owner” title.

“Small business means ‘not a big business,’” a startup founder told me years back.

In the late 20th century, modern financiers developed venture capital to speed up disruptive models in pursuit of outsized returns. The internet’s global scale and the low interest rates of the 2010s made speculative investment fashionable, and transformative. In 2018, a small consultancy leased an office adjacent to the Technical.ly newsroom. Three years later, it was a tech unicorn, and now boasts more than $100 million in annual recurring revenue.

Traditional categories of small, medium and big business imply a kind of stasis, because they can only describe a snapshot. In contrast, the optimistic recency of the word “startup” implies a bright future. 

Implausibly, “startup” has been used to describe both overgrown pre-IPO tech giants like Stripe and pre-revenue, early-stage minnows like those that Technical.ly tracks as RealLISTs. Technical.ly identified a funny divergence in company founding dates: Traditional businesses wanted to sound older; startups wanted to sound younger.

All this seems to have changed again. Higher interest rates squashed speculative tech hiring, at least outside the artificial intelligence gold rush. Shiny offices and big employee head counts lost their lustre. Entrepreneurship discussions idealize capital efficiency vs. grow-at-all-costs.

Nearly two-decades of “inclusive entrepreneurship” investment, as Technical.ly’s 2023 special report described, had an impact. The post-pandemic surge of business starts better mirrors American demographics.

Defending the dignity and power of ‘Main Street’ 

The next stage of wringing more out of American ingenuity might be to see fast-growing firms get closer to mirroring US demographics. 

This is where Hello Alice, with two female cofounders, initially made a name for itself. Gore often cites a stubborn statistic: 2% of VC investment goes to companies owned only by women, according to Pitchbook. There has been progress elsewhere; companies with at least one female founder attracted more than 1 in 5 VC dollars in 2024. That’s still a minority but nearly double what it was a decade ago.

Less progress has been made with racial demographics, but a similar story plays out. In pure business ownership rates, the post-pandemic entrepreneurship boom has been led in large part to growing contributions among Black and Hispanic Americans. 

But faster-growing companies show less representation.

Gore is betting Hello Alice’s software, services and policy advocacy can help change that, in part by defending the dignity and economic power of what some call “Main Street” business owners. 

“The vast majority of [our users] have fewer than 20 employees,” Gore said. “They are your dry cleaners, your construction companies, your local grocers.”

This class of business owner is not just underrepresented in venture capital but underserved by policy, she argues. “There should be a delineation,” she said. She often critiques SBA thresholds that define businesses with thousands of employees as small. “I think the way we fund small business should be different: the policies, the taxes, the tariffs, the way they’re permitted.”

Policy change can be painstaking, but Gore is optimistic. She sees opportunity in the AI revolution, predicting it will lower costs, increase margins and allow many more sole proprietors to run profitable businesses. “You’re going to see more and more of those come about,” she said. “Particularly with AI and the ability that you don’t have to hire as many people, frankly, anymore.”

AI is no panacea, of course. But Gore’s point is that the entrepreneurship boom has outpaced the definitions we still use to guide capital and policy. Others remind that companies of different size, stage and ambition have very different needs.

 “Let’s stop using definitions that are 100 years old,” Gore said. “AI is reshaping business, and policy needs to catch up.”

Americans love the idea of small business because we hope these stewards of culture will never change: the barber who gets our hair just right; the pizza shop we visited as kid; the bartender who knows our drink. Startup founders chase Schumpeterian creative destruction.

Many entrepreneurs want to change the world. Small business owners give us a sense of familiarity in a world awash in change.