Americans like to think of themselves as a go-getting, self-starting, entrepreneurial society. But just how entrepreneurial are we?

Well, thanks to a new study from the Ewing Marion Kauffman Foundation, we may have an answer. The foundation estimates that there were approximately 464,000 people creating new businesses each month in 2005, or 0.29 percent of the total adult population. The rate has held pretty much steady over the past decade. The states with the highest rates of entrepreneurial activity were Vermont, Colorado, Montana, Wyoming, and Idaho. The states with the lowest rates were Delaware, West Virginia, Alabama, Kentucky, and Pennsylvania. (The average for the states with the highest rates of entrepreneurial activity is three times higher than the average for the five lowest states.)

Most start-ups in small business don't get venture capital. But for those who do, VC money from state governments is becoming an ever more important source of funds.

A new study from the National Association of Seed and Venture Funds looks nationwide and finds that states have committed nearly $5.8 billion in VC programs, with $2.2 billion currently available for investment. (By contrast, private VC funds raised $25 billion last year, according to the National Venture Capital Association.)

It seems no matter who I have spoken with—small-business owners, investment managers—they all seem to agree that the Sarbanes-Oxley Act had a chilling effect on small business. (The 2002 federal law tightened financial reporting requirements for publicly owned companies.) As these folks see it, the compliance costs of Sarbanes-Oxley have deterred fast-growing private firms from going public and pushed small public companies to either be bought out by private companies not subject to the regulations or simply go private themselves.

When you think of Sarbanes-Oxley, you probably think of Enron or WorldCom. It's only natural.

The regulations were meant to clean up financial abuse at public companies. But they affect private firms as well. Many fast-growing private companies have been forced to follow the costly and time-consuming regulations to make their businesses more attractive for an initial public offering or possible buyout.

The U.S. Small Business Administration's Office of Advocacy recently put out a report showing that its annual effort to comply with the Regulatory Flexibility Act saved small business some $6.6 billion in regulatory costs in fiscal year 2005. A key part of the SBA's effort is working with government regulatory agencies early in the rule-making process to discuss the impact of new rules on small business.

It's the dream of some small-business owners to create such a fast-growing firm that someday it will go public. But that's where the Sarbanes-Oxley law comes in.

While the legislation was meant to clean up accounting abuses at public companies, there's evidence that it is affecting private companies. Only 10 companies backed by venture capital raised $540.8 million through initial public offerings in the first quarter of 2006, according to the National Venture Capital Association. That total of funds raised is down 25 percent from the first quarter of 2005.

What does the future hold for entrepreneurs? Here's an interesting thought from an E-mail chat I had with entrepreneur and futurist Thomas Frey of the Da Vinci Institute, a business and technology think tank.

U.S. News: What is changing and what do start-up businesses have to watch out for in the future?

Small-business owners seem to agree on this much: Illegal immigration is a serious problem.

According to a new survey by the National Federation of Independent Business, 70 percent classify it as "very serious" or "serious," and 86 percent say it should have a "very high" or "high" priority for Congress and the Bush administration. But after that, the issue gets a bit murkier.

Here's a great addendum to a story I cowrote recently on baby boomers becoming late-in-life entrepreneurs. It comes from Jeff Cornwall, director of the Center for Entrepreneurship at Belmont University in Nashville and author of the indispensable Entrepreneurial Mind blog. Cornwall makes two great points about the piece. First, if you're a boomer contemplating turning your lifetime expertise into a consulting firm, Cornwall warns, there is a downside:

Last week's issue of U.S.News & World Report featured a story on baby boomers' opting to forgo retirement in favor of starting a small business. Several of these entrepreneurs made the move as part of an overall lifestyle switch, deciding to pursue their dreams instead of continuing to merely exist as wage slaves. But many boomers may have to make the move out of necessity. A new survey of workers by the Employee Benefit Research Institute found that many of their retirement expectations "are like a piece of Swiss cheese—full of holes. For example, many have accumulated only modest retirement savings, underestimate the share of their preretirement income they are likely to need in retirement, and made no estimate of how much they will need to live comfortably once they retire." Among the findings: