[Senate Hearing 110-661]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-661

             WOMEN IN BUSINESS: LEVELING THE PLAYING FIELD

=======================================================================

                               ROUNDTABLE

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP



                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 19, 2008

                               __________

      Printed for the use of the Committee on Small Business and 
                            Entrepreneurship








 Available via the World Wide Web: http://www.access.gpo/gov/congress/
                                 senate








                   U.S. GOVERNMENT PRINTING OFFICE
42-396 PDF                  WASHINGTON : 2008
----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free(866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, 
Washington, DC 20402-0001










            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                 JOHN F. KERRY, Massachusetts, Chairman
CARL LEVIN, Michigan                 OLYMPIA J. SNOWE, Maine,
TOM HARKIN, Iowa                     CHRISTOPHER S. BOND, Missouri
JOSEPH I. LIEBERMAN, Connecticut     NORMAN COLEMAN, Minnesota
MARY LANDRIEU, Louisiana             DAVID VITTER, Louisiana
MARIA CANTWELL, Washington           ELIZABETH DOLE, North Carolina
EVAN BAYH, Indiana                   JOHN THUNE, South Dakota
MARK PRYOR, Arkansas                 BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         MICHAEL B. ENZI, Wyoming
JON TESTER, Montana                  JOHNNY ISAKSON, Georgia

                 Naomi Baum, Democratic Staff Director
                Wallace Hsueh, Republican Staff Director



















                            C O N T E N T S

                              ----------                              

                                                                   Page

                           Opening Statements

Kerry, the Honorable John F., Chairman, Committee on Small 
  Business and Entrepreneurship, and a United States Senator from 
  Massachusetts..................................................     1
Richardson, the Honorable Pamela, State Representative, 
  Massachusetts House of Representatives.........................     3
.................................................................

                        Roundtable Participants

Ames, Elizabeth, board director, Center for Women and Enterprise, 
  Charlestown, MA
Brush, professor, Candida, Paul T.Babson chair--professor of 
  entrepreneurship; division chair--entrepreneurship, Babson 
  College, Babson Park, MA
Cavanagh, Teri, principal, Teri Cavanagh and Associates, 
  Pocasset, MA
DeVenne-Zarba, Debra A., senior vice president/team leader, 
  Commercial Banking, Boston/North, Citizens Bank of 
  Massachusetts, Boston, MA
Forrester, Kerstin, president and owner, Stonebridge Precision 
  Machining & Certified Welding, Worcester, MA
Green, Sharon, president, Custom Copper and Slate, Ltd., 
  Medfield, MA
Hayward, Mark S., district director, Rhode Island district 
  office, U.S. Small Business Administration, Providence, RI
Heims, Debi, president, H&S Environmental, Inc. Westborough, MA
Jalan, Dr. Radha, president and chief executive officer, 
  ElectroChem, Inc., Woburn, MA
McDonough, Kate, president and owner, Waterfield Business Center, 
  LLC, Woburn, MA
Partridge, Laila, funder and chief executive Ooficer, Cover4me, 
  Wellesley, MA
Richardson, Hon. Pamela, State Representative, House of 
  Representatives, Boston, MA
Silva, Eydie, executive director, State office of Minority and 
  Women Business Assistance, Boston, MA

                       Statements for the Record

Richardson, the Honorable Pamela, State Representative, 
  Massachusetts House of Representatives.........................    40
DeVenne-Zarba, Debra A., senior vice president/team leader, 
  Commercial Banking, Boston/North, Citizens Bank of 
  Massachusetts, Boston, MA......................................    41
Forrester, Kerstin, president and owner, Stonebridge Precision 
  Machining & Certified Welding, Worcester, MA...................    42
Green, Sharon, president, Custom Copper and Slate, Ltd., 
  Medfield, MA...................................................    44
Heims, Debi, president, H&S Environmental, Inc. Westborough, MA..    46

 
WOMEN IN BUSINESS: LEVELING THE PLAYING FIELD Wednesday, March 19, 2008

                              ----------                              


                       WEDNESDAY, MARCH 19, 2008

                      United States Senate,
                    Committee on Small Business and
                                      and Entrepreneurship,
                                         Framingham, Massachusetts.
    The Committee met, pursuant to notice, at 10 a.m. in room 
319, Justin D. McCarthy College Center, Framingham State 
College, the Honorable John F. Kerry (Chairman of the 
Committee) presiding.
    Present: Senator Kerry.

  OPENING STATEMENT OF THE HONORABLE JOHN F. KERRY, CHAIRMAN, 
SENATE COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP, AND A 
            UNITED STATES SENATOR FROM MASSACHUSETTS

    Chairman Kerry. Well, good morning. I am sorry to get you 
away from the coffee. Let me officially call this roundtable to 
order because this is an official roundtable of the Small 
Business Committee, what we call a roundtable hearing.
    And as a result, every word will be formally recorded as 
part of the Committee record, and this will be circulated among 
the staff of the Committee and shared with my colleagues down 
in Washington.
    I want to assure you that this topic is a particularly 
important topic to the Committee. My Ranking Member, Senator 
Olympia Snowe of Maine, joined me in raising a series of 
serious questions to the SBA Administrator regarding the 
inadequacy of the women's procurement targets, the current 
application of the rules as they seem to be drafting them with 
respect to our efforts to augment certain businesses' access to 
procurement and inclusion in that process, not to mention the 
women business centers and other efforts. So there is a lot on 
the table in front of the Committee.
    I want to say to all of you here that I am particularly 
grateful to this group coming together. I want to thank my 
colleague in government, Pam Richardson here, who is the State 
Representative and represents us, for taking time and coming to 
be with us this morning, and all of you. I was looking through 
all of your resumes and background that you kindly sent in, and 
just couldn't help but be impressed by the remarkable breadth 
of experience that is represented at this table.
    A lot of you have been involved in government. A lot of you 
have been in some teaching. All of you engaged in this effort 
in one way or another, and it is just a wealth of experience 
sitting around this table. So I am confident we are going to 
have a very productive session, a good discussion and a healthy 
analysis of the things we need to do to deal with these issues.
    Obviously, women's entrepreneurship is important, not just 
from an economic point of view for all of the obvious reasons, 
but also there are issues that arise in terms of the social 
structure and fiber of the Nation and how we do that. A lot of 
people aren't aware of it, but 30 percent of all of our 
businesses in the country, which amounts to about 7.7 million 
businesses, are 51 percent or more owned by women. They employ 
over 7 million people, generate $1.1 trillion in sales 
annually.
    In Massachusetts, we have over 189,000 businesses that are 
majority owned by women, and they generates about $30 billion 
in sales, employing 177,000-plus people here in our State. 
Between 1997 and 2006, the number of majority-owned firms--
women-owned, majority-owned firms grew by 42 percent, almost 
double the growth that was seen among all firms.
    So this is a big opportunity, big deal in terms of how 
effectively we are responding within our traditional 
institutions to some challenges of access to capital, technical 
expertise, assistance, and other kinds of things. The downside 
of the statistics illustrate that, despite the recent 
successes, women-owned businesses still have lower revenue and 
fewer employees than their male counterparts.
    And although 6 percent of men-owned businesses have 
revenues of $1 million or more, only 3 percent of all women-
owned firms have those kinds of revenues. In regard to 
employment, only 16 percent of all firms with employees are 
owned by women. Even in Federal procurement, women-owned firms 
receive less than 4 percent of all Federal procurement, and 
that is below the target that we established within the 
Congress. And the difference, incidentally, is approximately $6 
billion of revenues that could be going to women-owned firms, 
were we to meet those goals. So those goals are not trivial by 
any sense of the imagination.
    The hurdles that stand in the way, as I am sure all of you 
will discuss this morning--and we can flesh it out a little 
bit--that stand in the way of women reaching their full 
economic potential in the country don't just obviously hurt 
that particular individual, but they have an impact downstream 
and in the community.
    Studies have shown that entrepreneurship correlates 
positively with increased income and decreased poverty among 
women. And since almost a quarter of all households with 
children who are under 18 are headed by a woman, that success 
obviously translates into a benefit for children, as well as 
for the community itself.
    In global context, there is also an importance to the role 
of women within business. Last week, Goldman Sachs announced a 
$100 million project to educate 10,000 women globally about 
business. And the project is based on the research that shows 
that educating women about business leads to higher wages, 
better health, and improved economic returns to the community 
at large.
    Sometimes there is a sense in Washington that, well, 
haven't we dealt with this? We have put the laws on the books. 
We have dealt with the issue of women's access to capital and 
any of the problems that affect women's participation. And some 
people try to dismiss some of the problems as sort of the 
inherent issues of being the prime caretaker of children and/or 
sometimes the prime household manager, and they kind of shove 
it aside in that regard.
    But according to accounts heard by us already in the 
hearings that we have had on these issues, women who seek to 
start and especially grow a business face fundamentally higher 
hurdles than men, and that is what we want to talk about today.
    It is not always that the hurdles are different. Everybody 
faces the hurdle of getting access to capital. But there are 
additional obstacles in that process of getting access to 
capital that people need to understand and that we need to 
define.
    So, in today's roundtable, we are going to kind of explore 
that a little bit, and we really want to hear your thoughts 
about it. We want to discuss ways to approach those problems, 
and I encourage everybody here to be open and free-wheeling.
    We have found that there is a great advantage to this 
process of having a roundtable rather than just sort of a 
standard hearing, because it allows much more interactivity and 
point-counterpoint, and it allows witnesses to interact with 
each other. And it produces, in many ways, a much stronger and 
more effective record for our approach to these kinds of 
issues.
    So the standard way we proceed in the Small Business 
Committee is to ask you to just take your name card, if you 
want to be heard, put it up like that, and then I kind of go 
around, and that is the best way to do it. And we will flag 
everybody from that point on.
    So let me turn to my good cohort in these efforts, 
Representative Richardson, and ask her if she would like to 
share some thoughts?
    Representative Richardson. Sure, I would. Thank you. I am 
going to scootch over a little bit because there is a weird 
table leg thing impeding the way I can sit.
    Chairman Kerry. No, that is not a problem.

      STATEMENT OF THE HONORABLE PAMELA RICHARDSON, STATE 
REPRESENTATIVE, MASSACHUSETTS HOUSE OF REPRESENTATIVES, BOSTON, 
                         MASSACHUSETTS

    Representative Richardson. Anyway, good morning, and I want 
to thank Senator Kerry and the Members of the Senate Committee 
on Small Business and Entrepreneurship for inviting me to 
participate in this important roundtable discussion. And let me 
welcome you all to my hometown of Framingham, which I proudly 
serve in the Massachusetts House of Representatives.
    As you may be aware, Framingham State College has a long 
history of helping women obtain the skills necessary to lead 
successful careers and fulfilling lives. Women from every 
background have realized their dreams in large part through the 
educational opportunities available to them at this 
institution. Framingham State College is, indeed, a fitting 
place to hold this type of discussion.
    Prior to serving in the State legislature, I worked as a 
real estate agent here in Framingham. And while a majority of 
my colleagues were women, I quickly realized that those in 
leadership positions within my firm were all men, and I often 
wondered why this was the case when there were so many smart, 
talented women thriving within the organization's sales ranks.
    Now that I serve in the State legislature, I am definitely 
a member of the minority. Only 25 percent of my colleagues are 
women. And while we scored----
    Chairman Kerry. But they think of you as one of the boys, 
right?
    [Laughter.]
    Representative Richardson. While we scored a huge victory 
with Senator Therese Murray, when she became the first woman 
Senate president, we still have a long way to go. While I am 
optimistic that we are in a state of transition and the way 
women's roles are perceived has undergone a transformation 
recently, more changes need to take place in order to level the 
playing field in business as well as in politics.
    Women in Massachusetts are fortunate to have access to the 
State Office of Minority and Women Business Assistance, and 
through this office, the Commonwealth spends $240 million on 
women- and minority-owned businesses, specifically offering 
services and certification enforcement, business assistance, 
and advocacy. This is just one program that is making a 
difference for women in Massachusetts, and it is the type of 
initiative that we need to make sure continues to happen in 
order to find that we will finally achieve full equality in the 
workplace.
    So I am looking forward to a thought-provoking discussion 
today on this important topic, and I am looking forward to 
continuing to work with the Senator and the Members of the 
Committee to make sure that we are doing all that we can to 
help women business leaders overcome the hurdles that they face 
and succeed here in Massachusetts and beyond.
    So, thank you.
    [The prepared statement of Representative Richardson 
appears in the Statements for the Record on page 40.]
    Chairman Kerry. Thank you, Pam, very much. Thank you very 
much.
    So let me start the questioning off a little bit. I threw 
out statistics earlier about the numbers of businesses that are 
owned, et cetera. Eighty percent of women-owned businesses have 
revenues under $50,000, and fewer employees serve in those. 
Only 16 percent of all firms with employees are owned by women.
    So, Dr. Brush, you have written a book about this very 
topic, and I know you have got a lot of thoughts about it. But 
why don't you start us off with what your principal thoughts 
about what those hurdles are, why the growth among women's 
businesses is falling.?
    Dr. Brush. Thank you very much. I am happy to be here. I 
have been at this for a long time, and, in fact, I am happy to 
see some friendly faces around the table--Teri Cavanagh and 
Elizabeth and some other people that I have worked with over 
the years since probably in the early 1980s.
    And I would just like to start by saying that I think, 
overall, there has been tremendous progress in the growth of 
women-owned businesses and women's entrepreneurship.
    And some of this is a result of some legislative changes in 
public policy and assistance programs. And I think today it is 
much easier for women to start businesses because there are 
many more programs and educational opportunities available to 
them. If you have a credit card and access to the Web and a 
pretty good idea, you can probably get started.
    The challenge is what happens when you really want to grow 
that business, or when you want to scale it? And that is where 
we find that women have slightly higher hurdles, as we would 
say. The hurdles for growth really involve getting access to 
capital or access to financing. In most cases, that is equity 
capital because if you are going to really scale it nationally, 
or internationally, and grow your business rapidly, you do need 
to have access to some sort of equity financing.
    Chairman Kerry. You started off by saying, ``If you have, 
it is fairly easy.'' What is the ``if you have?'' It is fairly 
easy to start?
    Dr. Brush. Yes, if you have a credit card and a Web address 
and a good idea.
    Chairman Kerry. I see. Just get started in the most basic 
way?
    Dr. Brush. Exactly. And so, you can get started. And I 
think we see that, evidence of that in the growth of self-
employment, and we see evidence of that as well with the 
numbers of businesses that are started each year. Many of those 
are women-owned firms.
    But when we think about scaling and growing rapidly, that 
becomes a challenge. And so, the access to capital is a major 
challenge. How do you find the equity financing that you might 
need, whether it comes from angel investment, whether it comes 
from the venture capital community, whether it comes from 
corporate strategic partners, or, in some cases, you are 
looking for bank financing or lines of credit. So that is a 
challenge.
    Chairman Kerry. And is it a challenge because there is just 
an institutional prejudice that sort of suggests, wow, you 
don't have a business school background? You don't seem to have 
had the experience. We don't trust you. Or would men be treated 
on an equal basis if they came with the same lack of 
experience, let us say, or background?
    Dr. Brush. I would say--I mean, if I throw out the numbers 
that we have done from our study, the research that we did 
started in 1996. And at that point in time, which was the 
beginning of the Internet growth and boom, there were around 
1,300 businesses that were funded by equity capital, and 30 
were women-owned.
    And so, there is a disproportionate number of women-owned 
businesses that were----
    Chairman Kerry. Is there any measure of how many women 
tried to get funding?
    Dr. Brush. No, and that is a data question that we do not 
have the answer to. But I can tell you that we looked at all of 
the investments in the United States over a 30-year period, and 
we analyzed the percentage of women-owned firms that were in 
that total investment pool, and it was never higher than 6 
percent for any single year.
    Together, all of the investments by venture capitalists in 
businesses in the United States, over a 30-year period, were 
never higher than 6 percent. And that is a quite a disconnect, 
if you think about the number of women-owned businesses that we 
have--and this is up to 1999--and the fact that only 6 percent 
are getting institutional venture capital.
    So why is that the case? I mean, that is the question on 
the table. Why is there such a small percentage of women-owned 
businesses that are having--that are gaining access to venture 
capital?
    And so, we haven't been able to answer all of the questions 
fully because the question you asked is, are they applying for 
it? Well, the venture capital industry is not regulated, as we 
all know, and so therefore, it is hard to find out how many 
women-owned businesses have applied to venture capital firms to 
gain access to venture capital.
    I just want to follow up on one thing. Venture capital--
less than 1 percent of all U.S. businesses are funded by 
venture capital anyway. But that is the top of the pyramid. 
That is where wealth is created, and that is where it is a very 
tightly controlled, homogeneous, tightly networked industry.
    And so, if we want wealth to be created by all populations 
of individuals--men, women, minorities, different groups of 
people--we would hope that the best innovations would be 
commercialized, and the best people, or the best populations of 
people would have access to that. I am not sure if I fully 
answered your question.
    Chairman Kerry. Well, I was trying to follow, but it is 
very difficult. I mean, if you don't have a measurement of how 
many are trying, you also don't really know what the universe 
is in the same way, because of the alternative life paths that 
women automatically wind up being placed in, in a sense, by 
virtue of child-raising. And so, it is hard to measure, isn't 
it?
    Dr. Brush. Well, let me ask you the question in a slightly 
different way.
    Chairman Kerry. Except--let me rephrase that. Except to the 
degree that you also have stay-at-home pops nowadays who are 
deciding to do that. You have a difference in lifestyle. But by 
and large, in America, you still have more women who are 
staying at home for a period of time in their lives and/or 
careers, and then they have to come back out and re-enter, 
which creates its own sort of hurdle of connecting, of 
networking, of establishing the credentials to break into the 
credit field.
    It is not a--it is just an inherent hurdle that is created 
by virtue of those choices. And I think what I am hearing--help 
me through this a little bit. Maybe I am hearing it wrong. But 
more and more younger people, I am finding--and I see this in 
my daughter's generation. She is now a doctor, but she is 
struggling with these lifestyle choices, as are a lot of her 
friends, who are sort of pulling back from some of the 1970s, 
1980s sense we are all going to go out and change completely 
how we live.
    And now they are finding, no, they want to take that period 
of time in order to raise their kids, have a family and do the 
other things, and then go out. And that creates a kind of 
hurdle that is hard to get over.
    Dr. Brush. But I think there are two things going on here. 
I mean, first of all, it is a generalization to say that all 
women want to stay home and have children.
    Chairman Kerry. Of course, it is. I understand that.
    Dr. Brush. And the second thing is that there is a 
population of women who do want to grow their businesses, and 
this was proven by those that have participated in 
springboarding. Several women around this table have been in 
that process.
    And so, if you look at springboard as a forum that brought 
together equity investors to mostly technology-based women 
entrepreneurs who wanted to grow, and over the course of those 
workshops, or those forums that were held around the country, 
there were 3,000 to 5,000 women that applied. So if the 
applicant pool of those women seeking growth capital is--call 
it 5,000, that says that there is probably enough qualified to 
receive at least more than 30 equity investment.
    So there is a pool of qualified women who do want to grow 
their businesses.
    Chairman Kerry. I completely understand that. Agreed. The 
only point I was making is that there are--there is, 
nevertheless, a large number automatically that wind up being 
in a very different category from men because of that 
predominant choice. That is all. And it is a question of how 
much--is there a way to institutionally break down the barriers 
that are created by that? I don't know if there is or not.
    Dr. Brush. And that is a very, very difficult question 
because I think what you are getting at is the perceptions that 
people have about whether women are qualified, or whether they 
want to grow because that gets to the aspirations and 
commitment piece. And I guess I would say that there are men 
that have low aspirations, too. Most men-owned businesses are 
small as well.
    But so, I guess the real question is for that group of 
businesses, both men-owned and women-owned, that want to grow, 
they should have equal access to the growth capital. So I think 
that is more my point.
    Chairman Kerry. Fair enough.
    Dr. Brush. And I think you are absolutely right about if we 
look at the distribution of women-owned businesses, or when 
women start businesses; it is kind of a bipolar distribution. 
You find more women who are younger and older that tend to 
start businesses, whereas for men it is more of a normal curve.
    Chairman Kerry. Right. That is what I was sort of getting 
at. I know there are some others that want to weigh in, but let 
me just finish this quick line of questioning.
    So with respect to that difficulty and access to capital, 
is there something--is that an inherent hazard of that choice? 
Is there a specific prejudice in it that we could somehow work 
to get over, or is there sort of a different kind of entry 
process, credentialing and/or other things we could put in 
place that might help people overcome it?
    Dr. Brush. Yes, I am sure there are some women around the 
table that have something to say about that. But I will tell 
you from the interviews that we did when we wrote our book, we 
did find examples of prejudices against women who were of 
child-bearing age, in terms of whether they would invest in 
those businesses or not.
    And so, that is the anecdotal, and I am sure that if you 
went around and surveyed a bunch of venture capital firms or 
angel investors, they would never admit to that. But I know 
that there are situations where there is a woman here in Boston 
who founded--she and her partner founded a company, and she was 
asked when she went in to talk to one of the venture capital 
firms, they said something like, ``I see that your partner has 
a wedding ring on. What are you going to do when she gets 
pregnant? When she leaves?''
    Chairman Kerry. I have heard those stories. I have heard 
employers who absolutely are wary of somebody who is about to 
go out on maternity leave, and so there is clearly that kind of 
a hurdle. No question about it.
    Ms. Cavanagh.
    Ms. Cavanagh. I was just sitting here with all of these 
thoughts. But I guess just----
    Chairman Kerry. That is what we want. Provocative.
    Ms. Cavanagh. Of course. I am just trying to get it into a 
sound bite in places. I guess just a 100,000-foot view and 
perspective that I had over my career at Bank of Boston to 
Fleet was running a program across 9 States for women business 
owners. And this period of 1997 to 2004 ended with the Bank of 
America merger.
    But during that time, that 7-year span across 9 States, it 
was really an incredible experience to observe from the 
traditional credit piece of this really what was happening for 
women. So the first thing is I am fairly shocked at the number, 
Senator Kerry, that this 30 percent number that you used 
because during that period, that trend was almost 50 percent. 
So I think there was a 50 to 51 percent ownership change in 
there. But still, the number was a little more robust than what 
it appears to be right now.
    One of the biggest takeaways that we would say from the 
research during that time, though, was that 16 percent of women 
are leaving corporations to start businesses. So they were--
that was the fastest growth segment. I am not so sure where 
that stands today, but that was, again, probably around 2000 to 
2002.
    We also did a national study with the Center for Women's 
Business Research, and we looked at fast-growth companies. And 
we called--we studied what we termed ``the gazelles.'' And 
these were men- and women-owned firms that were growing at 30 
percent annual rates of either revenue or employment. And we 
took a look at men versus women and then women fast-growth 
versus all women, and there were two distinguishing 
characteristics.
    The men were clearly getting to the credit earlier. It was 
52 percent versus 29 percent of women in both fast-growth 
companies had established and multiple bank credit pieces. So 
they had a term loan. They had a line of credit. They had 
leasing arrangements. Where women were just not getting to that 
piece soon enough. They were still funding their growth through 
operations.
    The other part that was very high in terms of 
differentiating pieces and gender was that men claimed that 
they more role models and they had mentors in the process, 
where women really felt that that wasn't really as available to 
them. Which then, as I view the story, it was the connectivity 
during that period of time that I think was so powerful for 
women in banking, that our program, combined with so many 
others in the country, because research, in my view, has always 
gotten the attention of corporate America. Corporate America 
then pays attention to what is being said, and women and money 
I don't really think is ever going to go away as a topic of 
interest, whether it is getting them started, getting them 
growing, whether it is--but the method has changed completely.
    So, during that time, there was the growth of women's 
business organizations. There was a tremendous growth in the 
women's business enterprise, triple their office locations.
    Chairman Kerry. Did that have something to do with that 
phenomenon that I just talked about? About the career choices 
concept, what people were doing affirmatively and breaking out? 
There was sort of that period of time where there were a lot of 
studies that suggest that women were much more active in making 
a choice to not be in a household, to go out and work, to 
pursue a career. And now people are retrenching slightly. Is 
there any evidence of that?
    Ms. Cavanagh. I don't believe that was the case. What I 
believed was that what we all created was a central place to 
go. So it was a self-selection. For those women that were 
thinking of starting a business, leaving corporate life, had a 
change in their lifestyle that required them, or I met a number 
of young MBAs who clearly didn't want to go to the corporate 
track because they had seen their parents downsized, right-
sized.
    It was in that period of money. It was in the heyday, so 
that their opportunity, their risking was much less. They 
didn't have as much to risk, and why not go there? But I 
actually think it was the calling out of the partnership really 
within the SBA to women's organizations to WBENC that were 
doing this to educate women and do what I call shorten that 
learning curve.
    So it was the synergy and the ability for women to see that 
there was programs and ongoing programs of education or 
connections that would--that they could avail themselves of. 
And that is how we learned kind of where they were.
    Now, currently, I live on Cape Cod. I am no longer--I 
didn't stay through that Bank of America merger, but I am still 
very involved with women entrepreneurs. And on Cape Cod, where 
I live, I have started three what I call GROW groups, Get 
Results with Other's Wisdom, and they are peer mentoring 
groups, facilitative. And these are for women who have--are 
growing companies. They are not startups. They are actually 
there.
    And Cape Cod is very interesting because it is a very 
local, very small. But the women who are growing their firms 
are doing some pretty innovative things, particularly around 
using the Internet for sales, creating huge marketing campaigns 
for destinations. But it is that same bottleneck again when it 
comes to the money.
    And so, for those that are thinking of licensing 
agreements, franchise opportunities, they get stuck in this I 
am not sure where the money comes in. And so, they have 
degrees. They have owned other companies. There isn't sort of a 
commonality other than to say in those previous days, we had a 
number of entities aligned that women could find, and I think 
it has just gotten harder again for people to access the 
knowledge, the information, and the people----
    Chairman Kerry. Why do you think it has gotten harder?
    Ms. Cavanagh. Because I do think the banking system and I 
think things go in waves, trends. And I think there was this 
huge, as Candy mentioned earlier, the research that came up in 
the mid 1990s was showing this incredible market opportunity. 
So I think everybody in banking wanted a piece of that.
    And that sort of naturally had a bell curve effect, and 
then with the early dot-bombs, the collapse of the biotechs, 
and all that equity money, it all kind of tailed off. And then 
I think as you----
    Chairman Kerry. So is this an awareness issue? Is this a 
sort of----
    Ms. Cavanagh. No, I think there was a retrenchment at that 
point.
    Chairman Kerry. A retrenchment.
    Ms. Cavanagh. I mean, capital was harder to get and so 
forth. And then I think what also happened was the continuation 
of mergers in banking.
    So Bank of America, as an example, looked at this program 
that I did. There were two schools. One was we definitely want 
to do this nationally. It was a best practice in the country 
and blah, blah, blah. So there was a lot of business that was 
generated from it. And at the same time, there was the 
agreement that it will take us at least 2 years to have this 
see the light of day because we have so much to do to integrate 
this bank.
    And then yet in speaking with them further, they are now 
very comfortable because they cut such a wide swath in the 
market they can talk the numbers and say we already bank 25 
percent of all small businesses in the country. So we are doing 
work with women. I tend to think that these dedicated programs 
or some ownership with the connectivity of Government, not-for-
profits, and corporate kind of closed a lot of that access gap 
and the education gap for women. I just don't see that there 
today.
    Chairman Kerry. Interesting. Laila Partridge, you are a 
founder and CEO?
    Ms. Partridge. Yes. And I have spent 10 years doing venture 
capital as well.
    Just a quick comment. I would agree. I think the banks are 
fantastic. As an entrepreneur, I have been really surprised at 
how quickly they really support your businesses. But the point 
I wanted to actually follow up on was one about the fast growth 
capability in venture capital.
    Having spent 10 years in venture capital and working with 
larger firms, you also never see women in those firms. And what 
I think is probably the biggest living indicator as to whether 
the women get funded is how that networking circle with the 
venture capitalist happens. And it really happens by being 
within their companies, getting promoted within the companies, 
and slowly getting a relationship with those venture firms.
    So traditional people who get funded in the venture firms--
and there are the exceptions, like the Google guys who walked 
off the street--but the vast majority of venture-backed 
companies come from existing relationships that those VCs have. 
And the VCs build those relationships starting at the director 
level up to the vice president level of the companies they 
fund. They track people who they think are good, and there is 
two elements to that.
    One is they don't put women into those roles if it were a 
stretch. They put men in those roles if it were a stretch, but 
they don't put women. So if it is a woman, you have to have 
done exactly that before. And I think that is just one of those 
challenges women often have.
    I think the second thing----
    Chairman Kerry. And because it is just an inherent 
prejudice, an inherent----
    Ms. Partridge. Yes, I mean, I put it back down to their 
mothers don't work. Their wives don't work. Their daughters 
don't work, even though they went to Harvard Business School. I 
mean, these are men who generally don't have as much exposure 
to executive women.
    By contrast, having been at Intel for 10 years, there were 
a lot of men who knew how to manage women. The most basic 
conversations that I have had in the venture world have made it 
very clear that very few of those men do manage executive 
women.
    So they ask the questions about how many children do you 
have? How much time do you spend with them? I mean, because 
they are grappling with how to manage that risk, and it is a 
risk in their minds.
    So I don't think it is a prejudice in a negative way. It is 
a businessman saying, ``Here are my risks, and because I 
haven't seen women perform in this role before--well who are 
young and child-bearing--I am going to ask about it, because I 
just need to get my arms around it.''
    So it is a higher hurdle. But once those women have that 
credibility, then you see--I just saw a top firm fund a woman 
in a business plan that makes no sense to me. Why? Because they 
believe in her. So once you are there in that circle, that is 
OK. But you need the risk to have that first job to then have 
exposure to them to then be able to prove yourself, and that 
proving yourself process, I see again and again as being 
harder.
    I have many women who have been at director or VP levels at 
VC-backed firms, and they will come back and say, ``I am in the 
board, and the board is clearly not believing what I say.'' So 
there is a performance issue that is a higher bar by far.
    Chairman Kerry. Interesting. And what do you think--how 
could the SBA and/or the Congress help address that kind of gap 
of awareness/experience?
    Ms. Partridge. Well, again, in my recent experience, I 
raise money. And I raise money in angel, and I was not able to 
get traditional angel groups to fund me. The people who funded 
me were people who knew me, who had worked with me and who 
understood what I could do. And my comment to--and there may be 
other extenuating circumstances, but my comment was--would be 
that it became----
    Chairman Kerry. Do you think that is different from a 
comparable male startup effort?
    Ms. Partridge. It is hard to say. I think it is very hard 
to get funding in general. Certainly, some of the questions 
that I got from the angel groups, I would probably put them in 
the category as not male-oriented. They would not have gotten 
those same questions. But I don't know. It could very well have 
been my business model and how I presented myself, various 
other things.
    What I would say is that if there was an ability to have 
matching equity money, if there was a certain amount of equity 
raised, I think you would really get a lot of bang for the buck 
there. Now you wouldn't want to give them outright grants----
    Chairman Kerry. What is the range of amounts you might be 
thinking of?
    Ms. Partridge. I think my sense is that between $300,000 to 
$1 million is enough to raise and start a company that is 
really going to grow fast. And I think it is very hard for 
women to get above $100,000, $200,000 out of their own 
Rolodexes. But I am just really pulling a dollar amount out of 
the air. I am going to look around and ask people to confirm 
that.
    So if you could match that in the Government sector, I 
think you would find you would give a lot of leverage to these 
women.
    Chairman Kerry. Dr. Jalan, you are looking to intervene 
here?
    Dr. Jalan. Well, I just wanted to make some comments. Just 
to give an idea, I took over my company, ElectroChem, after my 
husband's death. And it is a high-tech company. We are in the 
hydrogen and fuel cell area.
    And when we are talking about the equity money, or the bank 
support to grow the business and the lifestyle, I have come--I 
have been running this company for 16 years, and pretty much I 
have come to the point that I have to make it more like a 
lifestyle.
    Even after 4 years of continuous profits, I never could get 
a line of credit from any banks. I never could raise any money 
because when I went, they wanted to, ``Oh, well, you don't have 
a team.''
    Chairman Kerry. This is at what stage?
    Dr. Jalan. It is--the company was almost about 10 years 
old.
    Chairman Kerry. And what were the earnings at that time?
    Dr. Jalan. About quarter of a million.
    Chairman Kerry. How many employees?
    Dr. Jalan. About 10.
    Chairman Kerry. And at that point, they would ask those 
questions?
    Dr. Jalan. Yes.
    Chairman Kerry. Amazing.
    Dr. Jalan. So it has been a challenge. And I think the 
women's business, the equity is after you have some money, a 
line of credit from the bank; I never even got that. So I do 
think that there are those issues where you need to get the 
bank people to understand, and finally, they were getting me 
all the stories, and one banker, I was meeting him in a social 
setting, and he did say, he talked with me and said, ``So you 
are not getting the real story about why you are not getting 
the line of credit.'' I said, ``You said it. I didn't.''
    And so, that is out there, and that makes women do--fall 
back and say, OK, as long as I can pay the bills and keep on 
doing the work, I am just going to stay slow.
    Chairman Kerry. Well, it is interesting because the Center 
for Women's Business Research found that women made many more 
attempts, I think the average was about 4 attempts to get a 
line of credit and/or bank loan and something like 22 attempts 
to be able to get an equity participation. So what you are 
saying sort of documents that.
    Let us talk about that for a minute. If anybody else wants 
to weigh in on that, let us see, Ms. Ames, you are nodding your 
head?
    Ms. Ames. Yes.
    Chairman Kerry. What is that all about?
    Ms. Ames. I am Elizabeth Ames. I am with Center for Women 
and Enterprise. Senator, I would just like to thank you for 
your advocacy.
    Chairman Kerry. Before you thank me, can I do something?
    Ms. Ames. Yes.
    Chairman Kerry. I neglected at the outset to thank 
Framingham State College for welcoming us here, and Dr. 
Flanagan--Timothy Flanagan, president. We are very appreciative 
to be here and grateful for the hosting. So I want to thank 
them. Maybe we can put the record so that it reflects that.
    Go ahead. Sorry.
    Ms. Ames. No, not at all. The Center for Women and 
Enterprise is a women's business center, and you, personally, 
and the Committee have been phenomenally proactive since you 
took over leadership in coming to the aid of the women's 
centers.
    A couple of things that come into mind, we were talking 
about equity and we were also talking about credit. We are also 
talking about different income segments of the population. So 
if you have a minute, what I would like to do is talk a little 
bit about our client base because our client base goes from the 
most economically challenged woman who is trying to get off of 
welfare; a single mother may want an income to keep her kids at 
home, all the way up to the high-tech entrepreneur who is going 
after equity.
    And for 8 years now, we have either managed or had venture 
capital conferences, springboarded and our own, which have 
ended up helping women raise over a $\1/4\ billion of equity. 
So I think what Laila was saying is critical. The number of 
dollars, the percentage of dollars of VC going to women is 
about 5 percent. That is our numbers.
    So this issue of the network, the network extends even 
farther. A couple of years ago, the number of women partners in 
VCs in Boston was single digit. So decisionmakers are not men. 
So it is a social network as well that goes all the way back to 
business school.
    And if the key thought in VC is if you have a great leader, 
or a great business plan, the great leader really matters; it 
is that personal phone call that will get you into the network. 
The solution that we have found is also what Teri has been 
talking about, which is to trend access by having a network of 
VCs to training so that the VCs are training and introducing 
these entrepreneurs into that system.
    But again, that has been a successful model, but it is at 
the high end of the income stream. So it is a lot of job 
creation, but the greatest part of job creation really comes at 
the low end and the medium-sized businesses. And in both of 
those areas, I think it is very important to say that the areas 
that Candy and Teri were talking about, about access to capital 
are equally important because the prejudice there is about not 
only personal barriers about who are these women? Why should I 
talk to them? Have they done it before? There is a very subtle 
class distinction going on there as well as experience.
    But it remains extremely hard for them to get credit. And 
part of it is that the SBA programs are really special about 
how they have worked with the banks and worked with community 
lending in order to make sure that those pots are available. 
But as we have more and more of a crisis going on in liquidity, 
those pots have less and less interest in terms of the 
distribution. So the hurdles in those segments become higher as 
well.
    Chairman Kerry. That is true. And that is going to be just 
a reality and a difficult hurdle to get over anyway, because 
even within every circle, people are feeling that squeeze now.
    Ms. Ames. But in pure proactivity in terms of highlighting 
the work of women's business centers and saying that these 
partnerships are productive, and that it is not a question of 
prejudice, it is a question of opportunity, and also job 
formation; that is a powerful message.
    Chairman Kerry. What I want to figure out is whether we 
could go--it strikes me, listening to all of you, that this 
networking piece--awareness piece--looms very large here. And 
maybe if there is a way to create purposeful opportunity so 
that we could convene and kind of make people more aware. I 
mean, maybe Mark--I think the SBA itself, Mark is here with the 
SBA--could maybe host something where we pull angel investors 
and VC folks together and have a kind of fair.
    Every year, I have done a small business procurement fair, 
where we try to link--but it has been generic. In this case, 
maybe we ought to make something specific for women 
entrepreneurs and that community, and broaden that awareness. I 
don't know. I am just throwing the idea out. What do you think, 
Elizabeth?
    Ms. Ames. I think two things. I will go back to the 
segmentation again.
    Chairman Kerry. Go back to what?
    Ms. Ames. The segmentation of the population again, and 
talking about where the acceleration in job growth within the 
economy is coming. Because it is not coming from the VC-funded 
companies, even though that is what is sexy, that is what we 
all, or many of us in our demographic are really attracted to.
    What I think you can do with the lower-income and medium-
income women--and Teri can talk to this, in her segment of 
lending that she has worked with--is a couple of things. You 
can create pots of money that go through different distribution 
venues--for instance, community pots of money that can be 
matched by banks. Matching, again, is an important thing.
    But the distribution of where the funds go, really the 
lending decision goes through the community organization as 
opposed to the overburdened bank, That can be one thing. 
Particularly in small loans, that is very important. The work 
to do a small loan versus the work to do a big loan is 
basically the same.
    That is one thing, and I think the bully pulpit is really 
important because what we have had for--I have worked in two 
Republican administrations in the State and was registered 
until recently as one. But what we have had in Republican 
administrations has been a contempt, really, for what 
Government can do and the importance of saying these things 
over and over again. But the more you say a message, the more 
it is heard finally.
    Chairman Kerry. That is good advice, good advice.
    Ms. Ames. So those two things.
    Chairman Kerry. And we welcome your redemption.
    [Laughter.]
    Ms. Ames. I am working for Barack. If anybody wants to 
contribute, see me afterwards.
    Chairman Kerry. Dr. Brush, you have got your thing up 
again, and I was going to ask you, anyway, to intervene here at 
this point because in your book, you talk specifically about 
this hurdle and how you even document, I think, one person who 
made 20 efforts to have a conversation and only one return came 
back. And so, talk to us about that.
    Dr. Brush. Yes, actually, it ties in nicely with what 
Elizabeth just said because I think it is bringing these groups 
of people together. But there is an education piece on both 
sides, and I think one of the things that we found in our work 
is that a lot of times women don't quite understand the 
language of finance, that financial savvy.
    And this is an educational opportunity because for those 
women who want to grow, and maybe you don't want just to grow 
to the venture capital funding, you want to be that next level, 
like you were describing, Dr. Jalan. Is that you may want to 
get to that next level, but you have to understand the 
landscape.
    And so, the example we used in the book was about a woman 
who cold-call mailed her business plan to 20 venture capital 
firms. That is exactly what you don't want to do, because it is 
a very tightly networked industry, as Laila just said. It is 
regionally or geographically concentrated. There is some 
evidence that more than 50 percent of the people in the 
industry went to the same 5 schools. So it is a very 
homogeneous industry.
    And we know from what is called the theory of homophily 
that people like to do business with people who are like 
themselves. So if you have this very homogeneous group, if you 
happen to be different in some way, it is going to be hard for 
you to get over that barrier.
    So the education of women in terms of the landscape, it is 
important to understand if you are at X stage of growth, here 
are some funding opportunities that are appropriate for you, 
and this is how you go about seeking those different sources, 
whether it be a corporate partner, whether it be a loan, 
whether it be----
    Chairman Kerry. Does that have to be formalized? Does that 
have to be some kind of SBA outreach, small business outreach, 
women business center outreach? Or is it some other----
    [Laughter.]
    Dr. Brush. Actually, the Center for Women and Enterprise, I 
was on a panel last year, the Access to Capital, where we did 
just that.
    Chairman Kerry. But is there enough of it?
    Dr. Brush. No. There needs to be more.
    Chairman Kerry. So how do you get enough of it?
    Dr. Brush. Well, again, I think you can bring in partners. 
It is a partnership thing. You can have Government. You can 
have NGO's. Use educational institutions. There is a variety of 
different groups that can do that, and I think you do need to 
have some formalized programs that really help women understand 
what is an appropriate financing source for the stage of 
business that they are in.
    But I also want to talk about the supply side for just a 
second, as well, because that is another piece, and we have 
talked a little bit about the sort of the scarcity of women in 
the venture capital industry. We looked at 1995 and 2000 and 
found that even during the boom, the number of women in the 
industry declined. It was less than 10 percent. And if you look 
at the number of women in decisionmaking roles, that was small 
also.
    And so, if you think about how people become venture 
capitalists, and we are really lucky to have someone in the 
audience who understands that process--and that would be Trish 
Costello, because she ran what is called the Kauffman Fellows 
Program. And that was a program designed to grow venture 
capitalists, and I know that that program really tried very 
hard to bring in women and the minorities into that industry. 
And that program is still thriving.
    The other way is to think about how we can encourage women 
to become angel investors, and that is something I have been 
very personally involved in. As we ran an event at Babson 
College, just a year ago, the idea was to help women understand 
what if you looked at your portfolio of investments, one 
opportunity for you is to think about angel investing because 
you could have a great impact on society. You can help to grow 
businesses.
    So think about, if you have the means and the risk 
appetite, you could be an angel, and that would be another way 
to get more women into that investment community. So those are 
two----
    Chairman Kerry. Mark, you are the only male here. You can't 
retreat.
    [Laughter.]
    Mr. Hayward. No, Mr. Chairman, I cannot retreat, and I will 
not retreat. First of all, thank you very much for inviting the 
Administrator, and I am pleased to be here on his behalf. And 
he asked me to express directly to you well wishes to everybody 
here.
    And this is an issue that is very important to the SBA. I 
have known Teri for a very long time. I haven't had the 
opportunity to work with Elizabeth, but I have had an 
opportunity to work with the Center for Women and Enterprise. 
Let me tell you, there is no finer center in the country than 
the Center for Women and Enterprise, which is both here in the 
Commonwealth of Massachusetts, as well as in Rhode Island.
    And the number of things that have been established, we 
talk about the education piece and understanding, and I think 
Power Up!, which was started in Rhode Island and now has 
expanded to Massachusetts, really is one of those venues that 
should be looked at from an educational process. Because it 
takes not only women who are in business, but women who want to 
get in business and start--it is a 13-week process that is done 
pro bono, and actually, it is distance learning at this point 
in time because it is being a satellite feed into both Boston, 
as well as into Worcester.
    But it takes 13 weeks of going from having an attorney 
there, to having an accountant, to having SBA people. This is 
what needs to be done in order to be a successful entrepreneur. 
This is what you need to do to grow your business, and I think 
we started in Rhode Island, but it really has become something 
of an importance around the country. Because 500 women have 
gone through it in Rhode Island, they have now begun to expand 
into the Commonwealth.
    And people who are going through this process really are 
learning a tremendous amount as to what they should be doing 
from a business standpoint. Teri was there from the beginning, 
and it really--the Center for Women and Enterprise. And I 
always say, Mr. Chairman, I love my center director, Carol 
Malysz, in Rhode Island. I have had a tremendous relationship 
with Donna Good in the Center for Women and Enterprise.
    And it is a value, it is a value not only to the women 
entrepreneurs that are going through there, but it is a value 
to the agency because we take the women who have gone through 
this. Part of the process is you must do a business plan. When 
you get to that business plan portion, we at the SBA and my 
colleague from Boston, who is here, Bob Nelson, we actually 
work with the women entrepreneurs to try to get them loans. We 
are not bashful in taking them to the lenders and saying, 
``Here is a woman entrepreneur who has a business plan and who 
has a financial plan that is financeable. Take a look at it.''
    Chairman Kerry. It looks to me like that works out well. If 
that is successful, we should be doing a lot more of it.
    Mr. Hayward. I agree. Absolutely.
    Ms. Ames. One interesting thing about that program is that 
because they start with the concept, the women in that program 
self-select out. So by the time they come to you, these really 
are women entrepreneurs who are unstoppable, another important 
point.
    Chairman Kerry. That is important. That is a good point, 
too.
    Ms. Ames. That issue of free money is really critical.
    Chairman Kerry. Eydie Silva, you have your card up?
    Ms. Silva. I do. Thank you for inviting me, first of all.
    I think I want to speak to a couple of issues. I am from 
management consulting my whole career. I agree that getting 
venture capital funding is very, very difficult.
    As a shareholder of a research advisory company, we went to 
Wall Street. I was the only woman with four male shareholders, 
and it was a grueling process, very engaging. We thought we had 
a great business plan, which, at the end, we did because we 
sold the company to Reuters.
    But I think the point I want to make there is that getting 
venture funding is very difficult, and one of the things that 
we certainly found in that, and in my role at SOMWBA, is that I 
think having a solid business plan that sort of speaks to what 
we were just talking about, about educating people on the 
strength of their business plans. And the mentor program I 
think is absolutely critical. Because I have found in speaking 
with many women-owned companies, ``Well, I am doing this alone. 
I don't have a mentor. It is so busy out there in the corporate 
world, they don't have time for me.''
    So I think establishing a mentorship program is critical, 
and it is very similar to the males who have their network, 
whether it be at the Harvard Club, or on the golf course. I 
think it is critical because one of the things that you will 
find in business--and I have seen it time and time again--is 
that it is about the network, and that is how business is done. 
And I don't think we will get away from that.
    I think programs that support an infusion of capital 
through Government grants, I think, is a good thing, and there 
should be focus on it. I think it is very difficult to get a 
line of credit. We did the same thing, and I mean, we all put 
our houses up that had equity, and it is. So I do think that 
these are inherently difficult issues for all businesses.
    So I am not going to discount that, but I do think----
    Chairman Kerry. Do you think you got a harder going over in 
terms of the venture capital piece than a pure male counterpart 
group would have gotten within the venture capital process?
    Ms. Silva. Personally, I would say no because I think back, 
my experience certainly was difficult to begin with. We had 
made a solid business plan, and eventually, Reuters made the 
investment. And we sold the company to Reuters. So we were 
right. We just kept knocking on the doors of Wall Street, and 
it eventually happened.
    But I think--I really think that depends. I think it 
depends on how you are presenting yourself to a venture capital 
firm, what you are going in with, what the competitive 
landscape is for your business, the viability of your business, 
the scalability of it. I don't think it is so easy, and I think 
it is probably more difficult today to get funding than it was 
probably 10 years ago.
    Chairman Kerry. I want to come back to Laila, but let me 
just first ask if you would intervene because you have got a 
great background in lending?
    Ms. DeVenne-Zarba. Yes, thank you, Senator, and thank you 
for inviting Citizens Bank today. What I sort of wanted to lead 
off with is that Citizens, obviously, is the number-one SBA 
lender, and in 2007, we actually did 384 loans. Sixty-seven of 
those, or 17 percent, went to women-owned business. We were 
actually the highest lender who actually achieved that.
    Having said that, I have had many years of experience with 
small business, and I have been very passionate about trying to 
help women, very active with the Center for Women and 
Enterprise, and obviously very active with the SBA. And one of 
the first things that crossed my mind when I was reading 
through the materials for today was Ms. Green's story, and she 
talked about her challenges with dealing within SBA.
    And I read that, and I had to identify with that because I 
would look at that as a challenge with banking, as well. 
Because I think what women don't do as well as men is, you 
don't--you haven't figured out who is who. Who are the right 
people? You haven't aligned yourself with the right team. And 
so, she was struggling within the SBA to find the right people 
to get where she needed to be.
    And the same thing happens when it comes to the bank. 
Unless you talk to the right person who has the knowledge, 
knows the products, and can tell you what the bank is looking 
for, then you are set up to fail. And unfortunately, it is like 
anything. It could be the SBA. It could be the bank. It could 
be anybody. If you don't have the right qualified person behind 
you, you are not going to get anywhere.
    Chairman Kerry. Debra, when you say you are a team leader 
at the bank, which means----
    Ms. DeVenne-Zarba. Correct. Oh, I am sorry. I deal with 
small business.
    Chairman Kerry. You deal with small business, and I know 
you are particularly concerned, obviously, about women in 
business.
    Ms. DeVenne-Zarba. Correct.
    Chairman Kerry. Do you single that out within the bank? Do 
you have a targeted--do you have a target of some kind in terms 
of lending?
    Ms. DeVenne-Zarba. In terms of the women? We have not done 
that in the past, and I think we are starting to look at that 
more closely. Obviously, Citizens has done some tremendous 
growth. So we are no longer a smaller community bank. We are 
very much a national bank. We are within the top 10 in the 
country now.
    So we are sort of growing up, and I suspect we will look at 
that a lot more closely. Although I would argue we have done a 
lot in terms of the percentages; it should be higher. But, no, 
we do not have specifically those types of programs.
    Chairman Kerry. Do you find an awareness among your banking 
colleagues of some sensitivity to this, or is there some way to 
try to think about how one might penetrate that?
    Ms. DeVenne-Zarba. Well, you mentioned earlier some type of 
institutional prejudice perhaps with men versus women, and I 
would sort of say I don't think that is there. Now maybe the 
perception is that there is some of that there, and I would 
probably state that maybe men present their cases better than 
the women do. But I think there is an awareness.
    I mean, we clearly treat anybody who comes in that small 
business arena, and there are challenges there in terms of they 
tend to be a startup. They don't have enough equity. And even 
if you get them through that startup phase, I think Elizabeth 
pointed out--somebody did earlier--they will get to a certain 
point, and then they don't know what to do. They don't know how 
to take it to the next level.
    Chairman Kerry. Right. Are you able to actually mentor 
these folks?
    Ms. DeVenne-Zarba. Yes. In my----
    Chairman Kerry. You do? Assign somebody?
    Ms. DeVenne-Zarba. Yes, within the regional area, we do 
because we are dealing with companies typically under $25 
million in revenues, and that is how I perceive my core job is 
not just to give them the loan, but to educate them and tell 
them how we think, what we are looking for, how they need to 
plan their balance sheet and income statement for their future 
growth.
    Chairman Kerry. Laila, do you want to weigh in? And then I 
would love to ask, Ms. Green, if you would share that story, 
and then we can sort of build off of that?
    Ms. Partridge. Sure. I want to kind of comment on a bunch 
of these things in the context of venture capital versus angels 
because I think one of the things that people often overlook is 
the numbers for venture capitalists. For them, it is about 
return on investment, period. Pure and simple, don't care 
anything beyond that. If you don't get me a return on 
investment, don't talk to me.
    When you do the math that was the size of funds they 
raised; they look at the people administering those monies. 
Long and short of it, what it means is you need to have a 
business that goes from 0 revenues to $40 million to $50 
million in revenues in 5 to 7 years.
    I teach a class at CWE, which is a great program, with a 
bunch of women entrepreneurs, and I walk through this over the 
course of half an hour. So we get there, to that conclusion 
very much more detailed.
    Chairman Kerry. Dr. Jalan nodded in absolute affirmation.
    Ms. Partridge. And so what ends up happening to the women 
around the table is their jaws drop. It never occurred to them 
that these VCs had these expectations and these metrics, and 
that is what they are trying to achieve.
    Now the good news is that the VCs will help you grow. 
Right? I mean, that is the answer. They are mentors to help 
that. The bad news is very few of the women have the 
aspirations and the vision in their own sense of what they can 
accomplish if they want to get there that much.
    So when they go in front of presenting, first of all, they 
fail, first and foremost, because they are not saying, ``I am 
going to be a $1-billion market opportunity with $40 million 
revenues in 5 years, and here is how I am going to do it.''
    So part of it is communication, and part of it just simply 
is that they started the business because they feel the need to 
do a business, but they don't think that way. And so, part of 
it is I think if you are going to go and be successful in 
lending institution, or otherwise, I go back to Elizabeth's 
point, go toward the women in that middle section, which is--or 
high end, whatever you want to segment the opportunity, and 
look at angel investors. Encourage more angel investors.
    Find a way to make angel investors better educated 
investors because, believe it or not, I think they need 
education as much as the actual entrepreneurs. And I think that 
is the area where there is really a lot of great opportunity, 
because there is an enormous amount of wealth that has been 
created with Google and other types of companies. There is an 
enormous amount of small, successful entrepreneurs who would 
love to give back, but don't really necessarily have a means.
    You know, there are angel groups, but then I have also 
talked to investors who say, ``Well, I don't really fit in with 
this angel group. That is not really what I''----
    Chairman Kerry. Are you suggesting that they get involved 
directly, that they be lured into this specific segment of 
lending, or that they back some sort of education project or 
both?
    Ms. Partridge. Well, I hadn't even thought about it that 
way. I was thinking more from the perspective there are people 
who would be interested in helping and investing in new 
companies. They don't really know how to go about doing it. So 
I think there is an education gap----
    Chairman Kerry Right. So, you are talking about how you 
bring the angel investor to the table and marry them to the----
    Ms. Partridge. How you bring the investor to the table and 
marry to the process.
    Chairman Kerry. Right. Get the new folks who have got the 
money to sort of get involved, and get them interested in angel 
investing.
    Ms. Partridge. Now I think there are some extraordinary 
opportunities happening in the marketplace in exit strategies. 
So in the technology world, which is where I come from, for the 
first time in the last 2 years--and it really has been 2 
years--companies are selling for $20 million or less. Now, in 
the past, I was a mergers and acquisitions director at Intel, 
if it was under $20 million, you figured it was a fire sale, 
you just cram them. You just give them a little leeway.
    Now what you are seeing is something very interesting. 
There was a startup called Maya's Mom, started by mom, so 
Gravier demographic. Go take a look. If I am not mistaken, 
Johnson & Johnson bought them for between $13 million to $20 
million, if you believe the actual settlement. But I don't 
really know the details of that that much.
    But what is interesting is Johnson & Johnson bought them. 
In a high-tech world, that is not their core competency, and 
you are seeing----
    Chairman Kerry. You are seeing people look for broader 
diversity in their portfolios?
    Ms. Partridge. Larger companies are willing to take small 
companies that are started by women, and they are now starting 
to see the liquidity.
    Chairman Kerry. That is very interesting.
    Ms. Partridge. And that then has an ability to bring the 
angel investors in to start looking at businesses that don't 
have to meet $40 million or $50 million in revenue----
    Chairman Kerry. Do we have any role in that, or is that 
something that is just going to play out and happen? Do we have 
any role in encouraging it or----
    Dr. Brush. Yea----
    The Chairman. Incentivizing it?
    Dr. Brush. Yes, I was going to speak to that because I am 
very involved in some--we have angel groups that meet at 
Babson, and I go to all of the meetings for one of the groups. 
And just in New England, we have 19 organized angel groups. The 
Angel Capital Education Foundation collect data, and they have 
been doing some work to try to determine exactly what angels 
look for, how to become an angel you know, what is the process 
that you need to learn, and kind of how it works.
    Time wise, angels didn't even give their names out when you 
would go to presentations, but now there are groups of them. 
And we get 40 to 60 people that come to these meetings at 
Babson.
    It is estimated there are around 250,000 active angels in 
the United States. I am using--these are statistics from the 
Angel Capital Education Foundation. And to Laila's point, 
angels are investing smaller amounts of money. It is usually 
around $150,000 to up to, well, I haven't seen anything more 
than $2 million. But that is kind of the range, whereas venture 
capital investments are starting at $2 million and up.
    Chairman Kerry. What is the share of the company that they 
get on that?
    Dr. Brush. It depends on where they come in. If it is a 
biotech startup and there is already funding dollars into it, 
so the sector would make a difference in terms of when the 
angels would come in because a lot of biotech companies are 
grant funded, or university funded and tech commercialization 
spinoffs.
    If it is a de novo startup, then the angels might come in 
and get a nice little chunk. And if it is a tech business, like 
a Web 3.0 kind of business that has a faster track; it is going 
to be acquired faster. It is going to have a liquidity of that 
event sooner. And so, to Laila's point, some of these 
companies----
    Chairman Kerry. Is there a range? Can you give me a range? 
Is there some sort of range?
    Dr. Brush. Of a----
    Chairman Kerry. Of an angel, typical angel investor share 
of a company.
    Dr. Brush. I would say that is all negotiable.
    Ms. Partridge. I would say generally 20 to 30 percent.
    Dr. Brush. Yea, 20 to 30 percent.
    Chairman Kerry. That much?
    Dr. Brush. Yes, but you are going to get diluted.
    Ms. Green. Yea, never below 20 percent.
    Dr. Brush. You are going to get diluted probably if you 
need second, different round.
    Chairman Kerry. Got you.
    Dr. Brush. So the amount you are going to get in the 
beginning is going to vary depending.
    Chairman Kerry. Got you.
    Dr. Brush. But again, and the average amount for the 
individual investor can be as small as $10,000. So it is a way 
for--on the one hand, it is a way for women to participate in 
investing in companies, but on the other hand, it is a way for 
women-owned businesses that want to grow, to have access to a 
different source of capital.
    So, again, it is part of this getting the women together 
with these potential funding sources. And again, not every 
business is suitable because the angel investors are still 
looking for tech businesses for the most part. I mean, we do 
get a few consumer products businesses like Artemis One, for 
example, is a consumer products business.
    But most of them are in the tech space, and we are seeing 
some women-owned businesses that are presenting. I know that 
you have something to say about debt financing, and I think 
that is an important part.
    Mr. Hayward. I wanted to go to the angel investing as well. 
We were working with a company, Mr. Chairman, that basically--
and this is a commercial again for CWE--that went through the 
springboard. They went through the whole process. And when it 
got to the end of the process, they actually had individuals 
that came to them and said, ``Yes, you probably would be very 
good to have angel investing and VC included.'' And as the 
individual was going back to their office, they began to think, 
``Do I really want to give up 25 percent of this company that I 
have built from scratch?''
    And so, she actually--it is a minority-owned, African-
American-owned business who came to me, and I said, ``Are you 
really in that position? Is that what you want to do? Wouldn't 
it be easier to look at something else?'' And what we did is, 
we put them in touch with the 504 Program, and what happened 
was--is the acquisition of that particular facility really 
enabled her to grow that particular business without using VC 
and without giving up 25 percent of her company, which is 
really, I believe, a flaw basically.
    Ms. Partridge. Your knocking up on 20--20 percent.
    So this individual kept her company. She got another loan. 
We also married her up with a couple of other lenders, and she 
got a working capital loan on top of it. So really, the 
springboard and what CWE did from an educational standpoint 
really puts this minority-owned business to where they should 
be, which was growing the business by themselves and not 
looking at the VC side.
    Having said that, we look to the State a lot of times, and 
I know we have tried to do this in Rhode Island, and when I was 
the acting DD here in Boston, we tried to do it as well, and 
that is to have--listen, there is no such thing as free money. 
But the one issue that all businesses, particularly women-owned 
businesses, seem to be having difficulty with is equity. And 
equity can take many forms.
    We are talking about startups more than anything else. We 
say you can always get a loan from a family member or a friend, 
or you can get it from an enemy. It doesn't make any difference 
to us. But as long as it is subordinated on the balance sheet, 
it provides as debt equity to going out and getting a 7A loan 
from a Citizens Bank, or a Bank of America.
    And I think if we could concentrate from the women we see 
that come through the door who traditionally need access to 
capital--if there were programs such as in the State of 
Massachusetts, where they could fill that debt equity piece, 
then we could come in on the other side and help. And you would 
be surprised at the number of women-owned businesses that would 
begin to thrive and survive and grow, Mr. Chairman.
    Chairman Kerry. Sharon Green, Custom Copper and Slate. 
Correct?
    Ms. Green. Yes.
    Chairman Kerry. Tell us about it.
    Ms. Green. It is a small roofing company, but we also are 
GC. Well, I want to thank everyone who made it possible for me 
to stand before such distinguished guests. What you were 
referring to, I think, was the story of when I was going after 
a large contract, and I had been doing--I had just finished 
doing a million-dollar contract, which is huge.
    Chairman Kerry. Tell us about the business. How many people 
work there?
    Ms. Green. Right now, it is between five and nine.
    Chairman Terry. Did you start it?
    Ms. Green. Yes.
    Chairman Kerry. Yourself?
    Ms. Green. Yes.
    Chairman Kerry. When did you start it?
    Ms. Green. Actually was in Brockton. I started doing the 
neighbors' roofs.
    Chairman Kerry. No kidding. How many years ago?
    Ms. Green. Back in, actually, say 1994. In 1997, I 
incorporated.
    Chairman Kerry. Good for you. And when did you get--in 
terms of incorporating, what made you say, ``I have got to 
incorporate?''
    Ms. Green. Actually, it was my accountant who advised me, 
and I had no idea why.
    [Laughter.]
    Chairman Kerry. But you went along with his advice?
    Ms. Green. Yes.
    Chairman Kerry. And do you mind sharing with us what was 
your family situation at that point? Were you----
    Ms. Green. At that point, it was actually looking good, 
considering I had--what got me into it was I had been laid off 
2 years and----
    Chairman Kerry. From working in what?
    Ms. Green. Roofing.
    Chairman Kerry. OK.
    Ms. Green. Yes, union actually.
    Chairman Kerry. Good for you. Which union were you in--
roofers?
    Ms. Green. Well, actually, it is Local 17. HVAC and 
roofing, which they call it cornice. It is the fancy roof.
    Chairman Kerry. How many years had you done that 
previously?
    Ms. Green. I had done 5 years apprenticeship and then 12 
years in the field.
    Chairman Kerry. Wow. So then you decided you kind of wanted 
to go out and do your own?
    Ms. Green. Yes, you know, the unemployment scared me, and I 
realized it was almost easier going out than----
    Chairman Kerry. To fend for yourself, so to speak, than 
wait for the union job to come along?
    Ms. Green. Right, and also the politics with it. And it 
actually just--I figured, what did I have to lose?
    Chairman Kerry. Did you have kids at the time?
    Ms. Green. Yes. I had a son. He was born in 1992. And I 
think that is what kind of gave me the----
    Chairman Kerry. Impetus?
    Ms. Green. Yes.
    Chairman Kerry. Good for you. So then you decided to go out 
on your own. You started basically marketing yourself, trying 
to get jobs, working it through word of mouth, networking?
    Ms. Green. Yes. It started with just neighbors, and also I 
used to have people coming up to me on job sites when I worked 
the union and kept telling me that I should open my own. So I--
--
    Chairman Kerry. Good for you. So you had it open now, how 
many years?
    Ms. Green. Well, I start with 1997; I incorporated. That is 
when I legally----
    Chairman Kerry. Really got into business?
    Ms. Green. Yes. And so----
    Chairman Kerry. And how is it going?
    Ms. Green. Actually, this year not as good. But it has been 
fabulous since 8A. This year, well, the economy.
    Chairman Kerry. Yes, just housing, it is hard. The housing 
problem--foreclosures, and all that.
    Ms. Green. Construction.
    Chairman Kerry. And the business is based in Medville?
    Ms. Green. Yes.
    Chairman Kerry. And most of the work you do is in that sort 
of vicinity?
    Ms. Green. Actually, it was at one time. When I lived in 
Brockton, it was. Then through 8A, it seems I am doing more 
out-of-State work.
    Chairman Kerry. Really?
    Ms. Green. Yes, I did the big job in Vermont.
    Chairman Kerry. Good for you. So 8A has really opened up a 
new vista for you?
    Ms. Green. Yes.
    Chairman Kerry. So what are your thoughts now about where 
you would like to go with this, and what the hurdles are that 
you see?
    Ms. Green. Well, 8A is a 9-year program, and it just seems 
I just caught on. And I have, I think, 2 years left.
    Chairman Kerry. So you are worried about what we call the 
``dead zone.''
    Ms. Green. Yes.
    Chairman Kerry. When you get to the end of that and you are 
not quite ready to be out completely on your own, right?
    Ms. Green. Yes. I----
    Chairman Kerry. The transition is difficult?
    Ms. Green. Yes, I think it is going to be--I wish I had 
caught on quicker.
    Chairman Kerry. What do you mean by ``caught on?'' Tell us. 
The company actually caught on, the job or you yourself, in 
terms of the knowledge----
    Ms. Green. Actually, both. It took 2 years before I even 
landed any work in the 8A.
    Chairman Kerry. Right.
    Ms. Green. And I needed that time to learn, and I was still 
doing my private stuff. I do like a lot of McDonald's. So, and 
then when I finally figured out how it worked, I started 
landing small jobs, larger, as I figured out more about the 
program and how to approach COs and the Government.
    Chairman Kerry. Got you. I assume your track record now 
begins to make that a lot easier? You can just point to the 
jobs you have done and so forth. So people have confidence----
    Ms. Green. Yes, and because of it, the bonding; that is the 
most difficult. And right now, I am bonded for $3 million. Now, 
if I don't land a lot of work, that comes down, So----
    Chairman Kerry. So what would make the greatest difference 
to you? As you listen to the comments that you have heard--and 
some of this is talking about bigger amounts of money and 
bigger businesses than you are involved in. But you are an 
essential small business and a critical component of this 
fabric that we are talking about. What would make the greatest 
difference to you at this point?
    Ms. Green. A lot of what they were saying--education. 
Certainly if there was a program that catered to women,would be 
helpful, I think. I don't know if you would put like, with 8A, 
there is a time limit. Even if you put a time limit, that might 
be helpful. As long as it does cater to women, setting aside 
certain work for them.
    Chairman Kerry. Right.
    Ms. Green. It is not always just the money.
    Chairman Kerry. So, and does the procurement, does the 
Federal procurement process, where the Government goes out and 
starts bidding or asking for bids for certain things, does that 
make a difference to you?
    Ms. Green. Yes. Huge.
    Chairman Kerry. Big time. Considerably. Because if there is 
work on any kind of building or whatever Statewise. Is the 
State doing that?
    Ms. Silva. Let me just talk a little bit about that. SOMWBA 
came in and did a baseline performance looking at what the 
economic value of certification is, because why go through the 
process of certification if you are not rendering any economic 
value and growing your company and contributing to the growth 
of the Commonwealth?
    And so, as a result of that analysis, I looked at 
procurement practices, transparencies, and accountabilities, 
and we need to do a lot of work there. I think that it is sort 
of vague, and there needs to be more transparency. There isn't 
a lot to when women- and minority-owned companies are relying 
on public sector procurement to generate revenue.
    One of the things that I found is, there isn't the 
education relative to the process of bidding, and we are 
working on that with procurement under Governor Patrick.
    As well as the bonding is an issue for women- and minority-
owned companies. You have to have proof that you are capable 
and have the capacity to deliver to large scale-projects if, in 
fact, you want to be a prime.
    As a result of the inability to be bonded, you end up being 
a subcontractor, which limits your growth opportunities. And I 
think, again, sort of through an educational forum of helping 
minority- and women-owned companies to position their companies 
where they can move from subcontract status to prime contract 
status will again help to the build these companies and make 
them stronger.
    I think procurement--we need to do a lot of work there at 
the State, and we are committed to doing that, and we have 
acknowledged that.
    Chairman Kerry. Does the State have a target goal like the 
Federal Government?
    Ms. Silva. We do. They are not consistent from agency to 
agency. They are different. They are different, in fact, goals.
    Chairman Kerry. We should--Naomi is our chief of staff 
here, and Karen is staffing this meeting, but I would like to 
ask them both if they would figure out--I would like to sort of 
match where we are in Federal versus State and see if we could 
interrelate a little bit and maybe coordinate the efforts of 
the SBA and SOMWBA and see if we can't do a better job of 
trying to make people aware of that.
    I will bet you three quarters of the administrators aren't 
even aware that there is a goal. I will bet you it is higher 
than three quarters.
    Ms. Silva. They are aware of it. I don't--my professional 
assessment is that I don't think they understand the impact of 
achieving that goal and how it is going to diversify the 
economy here within the Commonwealth and what that contribution 
really is to all of us in the long term.
    Chairman Kerry. Seems like every time I am about to call on 
somebody, they put up their banner here. Kerstin Forrester, I 
was about to call on you, president of Stonebridge. I really 
was. I am not kidding you.
    [Laughter.]
    Ms. Forrester. I am in the real difficult sector of being a 
machine shop.
    Chairman Kerry. Tell us about yourself a little bit. Your 
business is what, a machine shop?
    Ms. Forrester. I own a machine shop. I started off in a 
large multi-national, spent 27 years there. I was actually one 
of the first general managers for a business unit at Northern 
Company.
    Chairman Kerry. Good for you. Northern, yes.
    Ms. Forrester. So lots of background, gone through getting 
funding with a good business plan because I was manager of 
corporate planning. So I know the value of a business plan and 
such that that wasn't as big a hurdle to get the financing up 
front when I decided to go up via small business. And looking 
at this, it is about $2 million--employing, depending on the 
economy, about 15 to 20 people. Right now, it is at 12.
    What made me want to talk about this are the goals.
    It is fine to set goals, and businesses set goals. But we 
look at achieving them, and that there are consequences or 
rewards for achieving or not achieving.
    Chairman Kerry. Right. And penalties for not achieving 
them.
    Ms. Forrester. I think the Federal goals, there are 
absolutely no rewards, and there are no consequences. So why 
set them?
    And it is still in manufacturing, it is very difficult, and 
I think it is particularly difficult for a woman to get into 
the old boys' network. And it is solid, the glass ceiling at 
that level is lower than in a male-dominated corporation. So I 
think addressing that and at least rewarding buyers at the 
Federal level and Department of Defense for--and even at the 
primes for trying new businesses.
    I don't advocate that you throw out good suppliers by any 
means. That is not in anybody's best benefit. But look at 
taking advantage of new companies that offer something because 
I think often women are much more innovative and diligent in 
providing these things. So that is----
    Chairman Kerry. Well, I think this idea you just raised 
about the rewards versus the consequences is a very good one, 
very, very important for us to think about. And I have been 
deeply frustrated, and I have been 20 years now in the Small 
Business Committee. I have been Chairman or Ranking Member for 
the last whatever number of years. And both Olympia Snowe and 
I, who have rotated in that role depending on who is lucky 
enough to win the Congress, are deeply frustrated. Deeply 
frustrated. I mean, we rail against these folks that come up to 
us about meeting these goals.
    And so, you are appealing to our frustration in sort of 
talking about maybe consequences, and even a reward ought to be 
part of it. It is hard to figure out how you reward in the 
Federal structure. It is not that hard to figure out how you 
could have some consequences.
    Ms. Forrester. And--but the consequences need to be painful 
enough. They can't just be little niggles.
    Chairman Kerry. Well, personally, I think people ought to 
lose their jobs if they don't make it. But I think it takes--
and that is one of the reasons I ran for President was the idea 
that you put people at the table and you say you are going to 
meet this goal. And if you don't meet the goal, you are not 
working for us.
    And there has been zero accountability in this structure. 
It is really disgraceful. So we are going to figure that out. 
We will work on that.
    Ms. Forrester. Can I add one more thing?
    Chairman Kerry. Of course, you can.
    Ms. Forrester. When you set the goals, I think the 
certification, self-certification at least in the industry I am 
in is fraught with fraud. There are an awful lot of male-owned 
machine shops who will put their spouse's name at the top, say 
she owns 51 percent, and she often may not----
    Chairman Kerry. She doesn't do anything and isn't involved.
    Ms. Forrester. No, she doesn't even do that. I have 
worked--and I know a couple of people who have done this that 
is a stay-at-home mom, which is wonderful. But----
    Chairman Kerry. But don't flaunt the system, right?
    Ms. Forrester. Don't say that you are women-owned.
    Chairman Kerry. So they are competing with you under the 
same, on the basis of the----
    Ms. Forrester. That is part of the old boys' network, which 
makes it that much more difficult to get into and change a 
buyer's mind. I have been told by Lockheed Martin directly, 
``We don't need any more women-owned machine shops. We have 
lots of them.'' There are very few out there----
    Chairman Kerry. Wow, and you are telling me that, 
basically, there really aren't.
    Ms. Forrester. No.
    Chairman Kerry. You are nodding in assent? So how do we get 
at that? What is the screening?
    Ms. Silva. Well, let me tell you about the work that I am 
doing with the Federal Government because that is--upon joining 
SOMWBA, that is sort of its history, and that certainly I have 
heard some of those stories. And immediately, I called a group 
of Federal reps together and said, OK, what is the underlying 
issue here?
    And we looked at the regulations, quite frankly. I think 
that the qualifying criteria in any business, and I think 
specifically with smaller businesses it is easier to hide 
things and sort of put things through. And just transfer of 
ownership, the validation of that, it is easy to put someone 
else's name and say that you own 50 percent of the company. 
However, on a day-to-day basis, you don't control that company.
    So it really is--we need to rewrite the regulations and 
some enforceability and what that enforceability would be and 
what the consequences are.
    Chairman Kerry. When you say rewrite it, rewrite it with 
different criteria or simply rewrite it with enforceable----
    Ms. Silva. More astringent criteria about----
    Chairman Kerry. With certification. You say, Kerstin, with 
certification. How would you do that? How would you do the 
certification?
    Ms. Forrester. Yes. WBENC--I am assuming WBENC still 
certifies women. We actually come in and do a ----
    Chairman Kerry. And they do a review.
    Ms. Forrester [continuing]. Half-day process ensuring that 
I have gone through the process. They ensure that I know what 
the business is; I know where the customers are; I sign the 
checks; I know the employees; I know the product we make.
    Chairman Kerry. I like that idea.
    Ms. Forrester. And so, it is not just that--I have been 
told that WBENC, they have gone to certify companies and the 
woman doesn't even have an office.
    Ms. Silva. And we do onsite visits and forensic exams. We 
have streamlined that process.
    Chairman Kerry. Well, that is a very good suggestion, and 
we will follow up on that, and we will figure out how we might 
incorporate that.
    Help me a little bit, two things have leapt out at me in 
this conversation. One is the importance of education and, two, 
the networking. How can we create a synergy with those? What 
could we do here to--actually, go ahead, Debra. You wanted to 
intervene, please.
    Ms. DeVenne-Zarba. Oh, no, no. I had a comment about the 
WBENC.
    Chairman Kerry. Oh, please do.
    Ms. DeVenne-Zarba. Because I serve on the WBENC Committee 
under the Center for Women and Enterprise, and it is a 
different process. They formally apply, and on the committee 
level, we review the applications, and we decide whether to 
recommend certification, deny, or further review. And if we 
recommend certification, it is still subject to a site visit.
    And we do go out there, and we do ask to see copies of 
checks, copies of contracts. We try to assess do they appear to 
be knowledgeable? Do they know the business? And it is 
difficult at times because it is questionable because if they 
meet the test of control, then even if it sort of feels like 
that they might not be 100 percent up and up, but their 
articles of organization and their bylaws, clearly the woman 
has 100 percent control, then we have to certify. So I will 
agree that we do----
    Chairman Kerry. Would you agree with this idea of having a 
more effective certification process?
    Ms. DeVenne-Zarba. Well, I don't know if she was referring 
to the State side of it, which I am not familiar with, because 
WBENC is separate from the State certification.
    Ms. Silva. Right. But our certification, our qualifying 
criteria, I think, mirrors each other most definitely.
    Chairman Kerry. This is adequate? Because Kerstin seems to 
indicate that it isn't.
    Ms. Silva. I do think it is adequate. I think the issue is 
the capability of, I think, historically--I have changed over 
70 percent of the SOMWBA staff in the last 10 months. But I 
think that you need the business experience to be able to go 
out, because you need to go beyond surface compliance, and you 
need to look at are you really controlling that company? Are 
you really going out there, if you understand your competitive 
market?
    And be able to speak intelligently to business owners and 
ask really difficult questions that you would know through the 
process of certification you might be able to say, ``Hey, wait 
a minute. That isn't an accurate statement,'' and then refer it 
over to an enforcement authority. And that is one of the things 
we are doing now at SOMWBA.
    Ms. Forrester. But the issue is not passing the 
certification. It is that the Federal Government does not allow 
self-certification. So all you have to do is check up. There is 
nobody----
    Chairman Kerry. I understand. I hear you, which is why we 
have got to do our piece to be--I got you. I understand.
    Ms. Green. I know of a case where SOMWBA came in and denied 
this company, and they turned around and hired a lawyer and got 
in.
    Ms. Silva. And again, that is one thing that I have found 
and if you look at, you know, I can't own the future--own the 
past, but what I can do is own the future, and that is what we 
are owning now is part of the regulations is there is an 
appeals process, and it is pretty broad. And it shouldn't be so 
broad because we should have voice. And whatever our 
determination is should hold weight. So that is something that 
we are putting forward.
    Chairman Kerry. Debi Heims, you want to share with us a 
little bit of your thoughts about H&S Environmental?
    Ms. Heims. Sure. Appreciate being here, and just wanted to 
say that H&S is a woman-owned engineering consulting firm, and 
we are also 8A status. And I wanted to comment--I am kind of 
jumping here. But I wanted to comment on the SOMWBA 
certification program. We certainly got certified from the get-
go. Our experience, background, we had no problem getting the 
certification.
    One concern I do have, however, is when we, as we grow our 
business--we have been growing in all the New England States 
and moving down the coast--we need to apply in each individual 
State, and the application process from State to State is 
quite--it is repetitive, and it is long-winded. Everybody wants 
to see your tax returns. The certification application is this, 
that.
    And it goes into each State, and they all field questions 
like I just got a letter from Texas as we are trying to get 
certified down there as a women-owned business. And it is just 
the basic questions, and there should be reciprocity from State 
to State.
    Ms. Silva. Are you aware of WBENC? Do you know about 
Women's Business Enterprise National Council, which is what 
Kerstin was talking about? They are an umbrella organization 
that, once certified, it goes across 50 States.
    Ms. Heims. In regards to doing work with the Department of 
Transportation, each individual State----
    Ms. Silva. Oh, I am sorry. I didn't realize that. They are 
corporate.
    Chairman Kerry. Yes, how would we--that is an interesting 
dilemma. I mean, how do you simplify that? Each Department of 
Transportation demands its own due diligence?
    Ms. Heims. May I take it a step further? If you apply, on 
that application, the first question it has, it says, ``Are you 
8A certified?'' And you check the box, and it says you can stop 
right here. But our firm doesn't know how to transfer the 8A 
certification to the Department of Transportation and, 
therefore, we continuously submit the full packages.
    Chairman Kerry. Can you transfer it, the 8A, to the 
Department of Transportation? Mark.
    Mr. Hayward. Mr. Chairman, as far as I know--and I am only 
speaking for the State of Rhode Island--if you are 8A 
certified, it is automatically transferred. I am not sure if 
she is talking about Texas? Is that right? I am not sure about 
the State of Texas, but there are others----
    Chairman Kerry. Nobody is sure.
    [Laughter.]
    Mr. Hayward. But in other New England States, if you are 8A 
certified, that is about as far as you have to go.
    Chairman Kerry. Well, we could try to work with you to see 
if we can figure that out. We will follow up with you 
afterwards and see if there is a way to try to unjumble that. 
Happy to do that.
    Ms. Heims. One other thing I would like to say, to comment 
in regards to the Federal Government. There are many agencies 
out there that certainly don't meet their goals for women-owned 
businesses. But I have to say the Corps of Engineers in our 
district has gone above and beyond to hold their prime 
contractors accountable to the subcontractors. I mean, we have 
built our business being a subcontractor. And we haven't really 
been a prime, and we are looking to take that step and the 
leap. And certainly, all the financials are worth it, the banks 
and stuff would give us. As we look forward, it is a great--it 
would be wonderful.
    But from the perspective of being a subcontractor and 
jumping into that prime contractor role, it would really be 
wonderful if there could be a women-owned program like the 8A 
program so we can take the time and really develop our 
companies to quality that the Government is expecting from us.
    Chairman Kerry. Well, that is a good thought. We have got 
to try to think that one through a little bit. It is a very 
good, provocative challenge and worth pursuing.
    We are sort of nearing the wrap point here, and I don't 
want to prolong anything that doesn't need to be.
    But I would like to ask sort of the go-around, give anybody 
that wants the opportunity to share their sense of what they 
have heard that they think is the most important thing, or that 
they thought through, as we try to wrap this up, either in the 
access to capital, or the networking, or the education, or the 
procurement set asides.
    What strikes you as the most doable and important 
difference that can be made? That is the question that is put 
on the table to help frame, wrap up here.
    Yes, Doctor.
    Dr. Jalan. We have been in several research--we get part of 
our funding from Federal grants. We have been active in SBIR 
program, but we have also applied to some of the bigger funding 
opportunities, specifically with the Department of Energy.
    And the challenge that we find is the whole issues related 
to finance, as I was saying. Many of these programs from the 
Department of Energy are 20 percent, 50 percent cost sharing. 
For a small enterprise, it is very hard to do that. And even 
though we have taken the risk to do the cost sharing from our 
operations on that 20 percent side, I do think it is worth to 
look into if part of those programs can also be set aside by 
the women-owned businesses because, as it is, we are competing 
with the big guys in that 20 percent cost sharing.
    So smaller businesses, per se, it is very difficult to 
compete. And with all the financial challenges that the small 
businesses have in raising money, this is one way that we do 
feel that we are putting out our own investment to grow the 
company. But since there is no mechanism that we can compete 
effectively, it gets very, very difficult. So just an idea that 
I would like to just put forth.
    Chairman Kerry. Good, good idea that is worth following up 
on. We will. Did you raise your hand, or are you just waving?
    Ms. Forrester. I thought we were going to go around.
    Chairman Kerry  I will go in any direction. Whoever is 
anxious to say something. Thank you. Go ahead.
    Ms. Forrester. I guess what the most important are to level 
the playing field I think, first of all, making sure that the 
certification process is clear because I think that gets the 
attention, that women-owned businesses need to be paid 
attention to.
    Chairman Kerry. In what way, how do you----
    Ms. Forrester. To get--if they are truly certified and 
not----
    Chairman Kerry. Truly certified. Honestly, fairly 
certified.
    Ms. Forrester. Right. Do that and----
    Chairman Kerry. We got that. OK.
    Ms. Forrester. And I think some of the actions, there are 
real hurdles in accessing, at least from the manufacturing 
standpoint. The--I don't know if you are familiar with that, 
but that is Department of Defense. To get in there and take a 
look at what they are offering, small businesses like mine, I 
can't afford the resources to go in and mine that and find the 
opportunities that are there. And there are a lot of them.
    Chairman Kerry. We have actually--we have some done stuff 
with that. We have had some discussions with DoD and others, 
both about--I mean, this has come up in the context of the 
procurement levels, of what is open to procurement. Last year, 
we actually opened up--one of the things I am proud we did was 
open up Homeland Security Department because they were 
exempted, and that is a huge portion of the budget.
    So we got that opened up, but we still have to do a better 
job of getting them to just follow through and meet the goals. 
As I said, there are billions of dollars at stake in that 
differential. So we are going to stay on that. I promise you 
that. We are.
    Kate, I apologize. We haven't heard from you yet.
    Ms. McDonough. That is OK. I can speak up. One of the 
things that--I run a business center. So I see a lot of 
entrepreneurs and startup programs, and the men tend to be able 
to grow up and leave. The women don't have a set point to know 
when to be looking for money. So the education piece is really 
key in a women's education.
    Chairman Kerry. Now how do we do that? This Goldman idea 
strikes me as becoming that much bigger in the context of 
everything I have heard here. That is a big deal, right?
    Ms. McDonough. Yes. Can I just say, though, even your 
initiative, your $3 million initiative, I only heard about that 
by mistake.
    Chairman Kerry. Really?
    Ms. McDonough. And I think I qualify, actually. So, because 
I went to an event that was put on, it was mostly men that were 
in attendance, and it was for women and minority-owned 
businesses. There were 10 women which were panelists, 40 men, 
and 6 women. And to me, they missed the mark. So I wanted to 
bring----
    Chairman Kerry. Where was this?
    Ms. McDonough. This was in Beverly that I attended this 
event. But we just brought it out to the Merrimack Valley, and 
we----
    Chairman Kerry. What was the event called?
    Ms. McDonough. I think it was just called The Initiative. 
That is what we referred to it as.
    Chairman Kerry. It was the initiative to bring people 
together to have this exchange.
    Ms. McDonough. Oh, the women's collaborative sponsored it 
to bring it out of the Merrimack Valley venture forum, to bring 
it to the women and the minority businesses within that region.
    Chairman Kerry. So we have to do a better job of making 
sure that networking/education gets out there?
    Ms. McDonough. It didn't get out there. And the problem, 
the issue that most of the women who attended this, we were 
very concerned, here you have appropriated the $3 million. None 
of us have heard about this. Therefore, we are afraid you won't 
go back and do it again because it appears that there is a lack 
of interest.
    When it wasn't actually lack of interest, it was----
    Chairman Kerry. Right, it was lack of awareness.
    Ms. McDonough. Yes.
    Chairman Kerry. How would you reach the folks, particularly 
the folks who aren't already in the network and, therefore, are 
unaware of this? The folks who are struggling that don't know 
where to go? How do you reach them--PSAs, public service 
announcements? How would you----
    Ms. McDonough. There are women's organizations. None of 
them--I called them. I asked them if they were aware of this. 
You have the National Women in Business. So there are a lot of 
things.
    Chairman Kerry. So more responsibility incumbent on the 
people administering these programs to make sure they are 
covering the broad waterfront in terms of inclusivity.
    Ms. McDonough. I would like to see that.
    Chairman Kerry. No, I think it is very important. That is 
what I was getting at in terms of networking. We can do a 
better job of that, no question about it. People don't talk to 
each other. They tend to be firefighting. They tend to be in 
survival mode and just trying to get from point A to point B. 
And it is hard to become proactive. So we need to figure out 
how to do that more effectively.
    Ms. McDonough. And how do people get their news? It is very 
difficult today. You filter out so many things. You know, just 
to----
    Chairman Kerry. I agree. All right, anybody else want to 
add something as we wrap up?
     Mark.
    Mr. Hayward. Mr. Chairman, first of all, one of the reasons 
why the Administrator asked me to come today to represent the 
districts at this particular roundtable is the fact that I am 
currently the district director in residence in Washington in 
his office. I have taken copious notes, and I am certainly 
going to have the opportunity to brief him.
    And one of the reasons why he has a rotating district 
director though is to get the field sense as to what is 
happening out here in the field, and then after I leave--from 
Oklahoma will be rotating in on April 1. But Mr. Chairman, the 
programs such as CWE clearly are a great asset to women-owned 
businesses and those who want to get into the business field, 
who want to be entrepreneurs.
    And I think, as advocates, district offices will continue 
to work with CWE to make sure that their programs are hitting 
the areas that absolutely need to be hit from a networking 
standpoint. And also, the district offices, Mr. Chairman, are 
willing and able to go out and assist women entrepreneurs in 
finding the access to capital.
    We know that it is difficult, but we have worked on a daily 
basis with the Citizens, Bank of America, and the community 
banks, some of them are actually looking for loans, and as we 
tell everybody, do not stop at one bank. Go to multiple banks 
to get that business financed.
    So, Mr. Chairman, from our standpoint on the SBA side, we 
will continue with women's procurement issues. In fact, we have 
partnered with CWE and others to put on women's procurement 
events because there is a lot of construction that is happening 
up here in New England.
    In fact, right in the Newport War College, there is $100 
million of new construction that is happening. I have talked to 
the Doctor before, the fact that we want to have women and 
disabled firms go for those contracts, and we have done a 
number of things here with my colleagues here in Massachusetts 
and around New England. So we will continue to do that.
    In fact, Mr. Chairman, as we sit here today, the gentlelady 
from Maine is having a similar event where Sandy Blitz, the 
regional administrator, is also talking about these very same 
issues on how we get more procurement, more women in 
procurement, more disabled vets in procurement.
    So, Mr. Chairman, I pledge to you to tell the Administrator 
and the deputy what we have done here today.
    Chairman Kerry. Thank you very much for doing that. We 
really do appreciate it and appreciate the sensitivity of 
listening at this point and trying to respond to these things.
    I know, Eydie, you have got to leave early. So why don't 
you shoot quickly, and then we will go over to--go head. Do you 
have anything to add? Oh, you are just have to run away. We 
thank you very, very much for being here. Really, it is 
wonderful to have you here. We are about to wrap up momentarily 
anyway. But thank you so much.
    Yes, Ms. Brush.
    Dr. Brush. One thing, and when you began this discussion, 
Senator, we talked about the numbers of women who had applied 
for funding through venture capital or through other sources. 
And that is actually something that the Government could help 
with, and that is to provide better data.
    Because I am aware that the CBO survey for census was 
discontinued. And so, we actually know less about women 
business owners and what they do than we did in prior years. 
And so, adding, making more data available and actually 
answering that question of how many women are actually applying 
would be great either through a key process or through----
    Chairman Kerry. And part of that is--I hate to say it, and 
I have been very critical of the Administration for this. And I 
think appropriately so, incidentally. I know you won't be 
surprised to hear that. But this is the biggest single budget 
cut agency in the Government today, which is ridiculous. It is 
insulting.
    And I know you are not saying anything, Mr. Hayward, but 
everybody is being asked to do more and better with less, and 
it just doesn't work after a certain point. It takes people to 
collect data. It takes people to go out and educate and do 
things. It is labor intensive. So we are sort of tired of 
hearing that.
    And this is bipartisan on the Committee. Olympia Snowe 
would sit here and say the same thing, as would John Thune from 
South Dakota and Johnny Isakson from Georgia and so forth. 
People are really trying to get the CBO folks to--the OMB 
folks, excuse me, not CBO--the OMB folks to wake up and realize 
what is happening.
    So bottom line is I hear you on the data. We are--I got 
$100 million--people don't know this, incidentally--into the 
budget last week, thanks to Kent Conrad and our budget efforts, 
for small business. I am plussing up the small business budget 
by $100 million, and hopefully, we can do 7A and outreach and 
procurement and a lot of other things better as a consequence 
of that. And I hope we can hold it as we go forward. That is 
our hope anyway. Elizabeth and then Debra.
    Ms. Ames. Very quickly. What I heard most from this 
conversation is if this problem were a business problem, we 
would analyze it that it is a distribution problem. So we have 
a problem with information. We have a problem with access to 
capital. We have a problem with education. We have the need on 
one hand. We can't get it to the people on the other hand.
    The reason CWE is cited so often is we have such a high-
quality output. So if this were a business, what I would say is 
why don't we test the distribution channels? Why don't we see 
if there is a way we could come up with different solutions and 
pick the ones that are the highest yield, the best quality of 
women entrepreneurs that come out of it.
    Doesn't need to be a huge test. We could do it in 
Massachusetts. We could help here at CWE. All of us around the 
table could come up with something that could be----
    Chairman Kerry. Well, let us try to do that. It is a good 
idea.
    Ms. Ames. Well, you will have something to base what you--
--
    Chairman Kerry. I think it would be terrific. It would be 
great. It would help us leverage all of the other places.
    Ms. Ames. And the reason for this is right now the 
distribution channels for capital are the VCs and the banks. 
And both of them are being increasingly squeezed in the 
liquidity squeeze.
    Chairman Kerry. Got you.
    Debra. You are going to solve the liquidity right now.
    Ms. DeVenne-Zarba. Yes. In terms of leveling the playing 
field, it is a small thought and it might be more immediate. 
But I think for the women-owned businesses who go through the 
trouble to go through training, whether it be Power Up! or some 
other program that is out there, but if they are going through 
this expensive training, they should get some kind of 
certification, and that should one-up them in terms of going to 
the bank to get that loan.
    And so, to me, that is a partnership that is collaborative, 
that is bringing the parties together that is helping a women-
owned business who is serious. It is helping her establish that 
network.
    Chairman Kerry. I think you guys ought to really think 
about how you do that. You should take the lead because you are 
the lead agency. You have got the best leverage fulcrum, and 
you ought to be able to pull the parties together in a 
proactive way to help make that happen. And we should try to 
figure out how to do that.
    So last comment?
    Ms. Green. I just wanted to reiterate that the 8A program 
is great. I think women need something to be set aside for them 
similar, and also that not all the procurement agencies, they 
seem to be giving it to the same people in 8A, and they are the 
larger companies.
    Chairman Kerry. Yes, we have been having a fight about 
that. It gets filled up fast, and then it gets filled up by 
large--I mean, that is part, that is a reflection of a number 
of different things, the amount of money available and sort of 
the ease with which it gets dealt with that way. I mean, it is 
a lot of different things. But you are right. It should be 
shared among smaller and more.
    Ms. Green. Yes, if there is any way that--again, the goal 
might be----
    Chairman Kerry. Well, we are going to take a look at that. 
We are going to discuss this 8A thing when we go back.
    Ms. Green. OK. And the last was one of the agencies that do 
work is the PTAC. Well, it is the Mass. Small Business 
Development Center has been a huge help.
    Chairman Kerry. Super. That is good.
    Well, let me thank everybody. First of all, I want you to 
know, and I don't say this casually at all--how much respect I 
have for all of your endeavors here. I mean, you folks are 
pioneers in ways that neither Mark nor I can be, simply because 
we were born into the old network, so to speak. And I really 
admire it.
    It is very tough to break down barriers, always has been. 
And it takes a kind of perseverance and an attitude that is 
very special. So I salute you for that, and particularly those 
of you who are on the front lines as CEOs and founders and 
practitioners at that level, and those of you who are helping, 
Elizabeth and everybody else, who provide the service. All the 
service folks here are just as key.
    What we have got to do is get more awareness, improve 
rapidly the education opportunities and the networking 
opportunity, and then probably the access to credit and equity 
and capital and so forth will improve very rapidly as a result 
of our doing that.
    But keep on keeping on. I mean, keep on talking about this 
and helping us to be aware of our own better opportunities to 
try to network and make good things happen. And I am confident 
that if we could plus the budget up a little bit, which I hope 
we will do, we can make a real difference.
    And at this time of illiquidity and lack of confidence and 
so forth, it is even more critical because you have got so many 
folks who are on the edge or just starting off, and the worst 
thing in the world would be to have them all sort of crushed at 
the startup because of the economy now. So this is a moment 
where the SBA ought to be doing more, not less, in fact, and my 
hope is that we will be able to.
    So this record, we will kind of--I don't think we will keep 
this record open. You want to? Will there actually be any 
questions submitted? Well, if anybody had any additional 
questions for the Committee, I want to leave them the right to 
do that. But I will leave it open for about a week, which means 
somebody might ask something of you for further inclusion in 
the record.
    And if you want to submit anything, if any of you wrote 
anything, if you had a prepared testimony, all of it will 
appear in the record as if you had spoken it in full. So if you 
leave those here with us, we appreciate that very, very much.
    [The prepared statements of Ms. DeVenne-Zarba, Ms. 
Forrester, Ms. Green, Ms. Heims, and Representative Richardson 
appear in the Statements for the Record.]
    Chairman Kerry. And again, thank you. This has been very 
helpful, and it helps to focus our efforts down in Washington, 
and we look forward to continuing.
    Pam, do you want to add anything?
    Representative Richardson. No, I just thank you very much 
for inviting me to be part of this. And I am looking forward to 
hopefully getting a copy of the transcript so that I can sort 
of digest it all again.
    Chairman Kerry. We would be happy to do it. And we want to 
thank our reporter, who has been busy. I thank you so much.
    So, with that, and all who took part and for the Framingham 
State folks who helped to make this room available and 
everything, and to my staff, I appreciate their efforts, thank 
you very much. We stand adjourned.
    [Whereupon, at 11:56 a.m., the hearing was adjourned.]
                       STATEMENTS FOR THE RECORD

     Prepared Statement of the Honorable Pamela Richardson, State 
    Representative, Massachusetts House of Representatives, Boston, 
                             Massachusetts

    Good morning. I would like to thank Senator Kerry and the 
members of the Senate Committee on Small Business and 
Entrepreneurship for inviting me to participate in this 
important roundtable discussion.
    Let me welcome all of you to my hometown of Framingham 
which I proudly serve in the Massachusetts House of 
Representatives. As you may be aware, Framingham State College 
has a long history of helping women obtain the skills necessary 
to lead successful careers and fulfilling lives. Women from 
every background have realized their dreams in large part 
through the education opportunities available to them at this 
fine institution of higher learning. Framingham State College 
is indeed a fitting place to hold this type of discussion.
    Prior to serving in the State Legislature, I worked as a 
real estate agent here in Framingham. While a majority of my 
colleagues were women, I quickly noticed that those in 
leadership positions within the firm were all men. I often 
wondered why this was the case when there were so many smart, 
talented women thriving within the organization's sales ranks.
    Now that I serve in the State Legislature, I am a member of 
the minority. Only 25 percent of my colleagues are women. While 
we scored a victory recently when Senator Therese Murray became 
the first woman Senate President, we still have a long way to 
go.
    While I am optimistic that we are in a state of transition, 
and the way women's roles are perceived has undergone a 
transformation recently, more changes need to take place in 
order to level the playing field in business as well as in 
politics.
    Women in Massachusetts are fortunate to have access to the 
State Office of Minority and Women Business Assistance which 
promotes the development of certified minority business 
enterprises, women owned business enterprises, and minority 
non-profit and women non-profit enterprises.
    Through this office the Commonwealth spends $240 million on 
Women and Minority owned businesses, specifically offering 
services in certification, enforcement, business assistance and 
advocacy.
    This is just one program that is making a difference for 
women in Massachusetts and it is the type of initiative which 
needs to happen if We are to achieve full equality in the 
workplace am looking forward to a thought provoking discussion 
today on this important topic and working with the Senator, and 
members of the Committee to make sure we are doing all we can 
to help women business leaders overcome hurdles and succeed 
here in Massachusetts. Thank you.




                                  
