A requiem for Ron Paul

(FORTUNE Small Business) -- Ron Paul's Friday announcement that his presidential campaign "will soon wind down" removes from the race a quixotic figure whose doomed pursuit of the White House inspired libertarians and free-market purists, including many business owners who loved his message about a nation free from regulatory fetters.

"Imagine what it would be like if we had no income tax in the country?" says Donald Huffines, co-founder of Dallas residential development company Huffines Communities and a Ron Paul donor and fundraiser. "I don't think anyone would do more for business - small or large - than Ron Paul. He would eliminate the role of government in our business lives, and the GDP growth of the country would skyrocket as a result."

Paul's groundswell played out in the grassroots. His average donation size was just $102, according to his campaign, but he led the GOP field in fundraising in 2007's last quarter, bringing in $20 million. Paul plans to continue fundraising for a succeeding organization to his campaign, one that will continue pushing "the message of human liberty," he said in a video message posted Friday on his website. He also intends to continue trying to amass as many votes as possible in the GOP's remaining primaries, though he acknowledged that he will not be the party's presidential nominee.

Paul's popularity among entrepreneurs was always based more on philosophical kinship than pragmatism. A passionate believer in free markets, Paul opposed both government regulations and government handouts - he would do away with the IRS, but also with corporate bailouts and assistance programs. In his 10 Congressional terms, Paul earned the nickname Dr. No for voting against almost every bill raised in the House of Representatives.

That laissez-faire streak appealed to business owners who dreamed of life with no governmental fetters or safety net.

"I was raised to believe that there was boundless opportunity for me if I worked hard and played by the rules, but over time the regulations have moved to where it's the straw that breaks this camel's back," said Paul supporter Jim Ross, founder of the Talisman Group commercial real-estate firm in Austin. "We want to be left alone by government."

From a libertarian perspective, less government intervention creates a more level playing field for smaller companies. "In many cases, larger businesses are the benefactors of corporate welfare and are beneficiaries of government aid," said Libertarian Party of Texas Chairman Pat Dixon.

Paul's departure from the presidential field leaves the "keep your cold, dead hands off my business" crowd without a standard bearer - though in his farewell message, Paul pledged to help lead whatever movement his supporters keep alive.

"Though victory in the conventional political sense is not available in the presidential race, many victories have been achieved," Paul said in his video. "We must remember: elections are short-term efforts. Revolutions are long-term projects."

-Reporting by Renuka Rayasam and Christine Perez