[Senate Hearing 115-265]
[From the U.S. Government Publishing Office]










                                                        S. Hrg. 115-265

         STRENGTHENING THE ENTREPRENEURIAL ECOSYSTEM FOR WOMEN

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 26, 2017

                               __________

    Printed for the Committee on Small Business and Entrepreneurship




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        Available via the World Wide Web: http://www.govinfo.gov
        
        
        
        
        
        
        
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                         U.S. GOVERNMENT PUBLISHING OFFICE 

28-248 PDF                     WASHINGTON : 2018      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED FIFTEENTH CONGRESS

                              ----------                              
                    JAMES E. RISCH, Idaho, Chairman
             JEANNE SHAHEEN, New Hampshire, Ranking Member
MARCO RUBIO, Florida                 MARIA CANTWELL, Washington
RAND PAUL, Kentucky                  BENJAMIN L. CARDIN, Maryland
TIM SCOTT, South Carolina            HEIDI HEITKAMP, North Dakota
JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
JAMES M. INHOFE, Oklahoma            CORY A. BOOKER, New Jersey
TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware
MICHAEL B. ENZI, Wyoming             MAZIE K. HIRONO, Hawaii
MIKE ROUNDS, South Dakota            TAMMY DUCKWORTH, Illinois
JOHN KENNEDY, Louisiana
          Skiffington E. Holderness, Republican Staff Director
                 Sean Moore, Democratic Staff Director
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                            C O N T E N T S

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                           Opening Statements

                                                                   Page

Risch, Hon. James E., Chairman, and a U.S. Senator from Idaho....     1
Shaheen, Hon. Jeanne, Ranking Member, and a U.S. Senator from New 
  Hampshire......................................................     2

                               Witnesses

Gore, Elizabeth, Entrepreneur-in-Residence, Dell, Sonoma, CA.....     3
Chadwell, Tracy, Founding Partner, 1843 Capital, Greenwich, CT...     8
Richards, Michelle, Executive Director, Great Lakes Women's 
  Business Council, Livonia, MI..................................    12

                          Alphabetical Listing

Chadwell, Tracy
    Testimony....................................................     8
    Prepared statement...........................................    10
    Reponses to questions submitted by Senator Inhofe and Senator 
      Duckworth..................................................    44
Gore, Elizabeth
    Testimony....................................................     3
    Prepared statement...........................................     5
    Responses to questions submitted by Senators Inhofe, Young 
      and Duckworth..............................................    40
National Women's Business Council
    Statement....................................................    32
Richards, Michelle
    Testimony....................................................    12
    Prepared statement...........................................    14
    Reponses to questions submitted by Senator Duckworth.........    44
Risch, Hon. James E.
    Opening statement............................................     1
Saujani, Reshma, Girls Who Code
    Statement dated October 26, 2017.............................    34
Shaheen, Hon. Jeanne
    Opening statement............................................     2
    Chart titled ``Status of Women-Owned Businesses''............    29
Women Impacting Public Policy
    Statement dated October 25, 2017.............................    36

 
         STRENGTHENING THE ENTREPRENEURIAL ECOSYSTEM FOR WOMEN

                              ----------                              


                       THURSDAY, OCTOBER 26, 2017

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:30 a.m., in 
Room 428A, Russell Senate Office Building, Hon. James Risch, 
Chairman of the Committee, presiding.
    Present: Senators Risch, Ernst, Young, Kennedy, Shaheen, 
Cantwell, Heitkamp, Coons, Hirono, and Duckworth.

OPENING STATEMENT OF HON. JAMES E. RISCH, CHAIRMAN, AND A U.S. 
                       SENATOR FROM IDAHO

    Chairman Risch. I know everybody is having a good time and 
networking and moving the enterprise forward but we really 
should get started.
    We have a vote starting at noon so we are going to be on a 
bit of a short string here. That should not, in any way, 
denigrate the importance of this hearing of the Small Business 
Committee. And what we are going to do today is we are going to 
explore ways to help women-owned businesses reach their full 
potential and grow the American economy.
    And I certainly want to thank my colleague, Senator 
Shaheen, for working together on this. This is a matter of 
great importance to all of us and to all of America, even 
though all of America sometimes does not know it. Would that be 
a fair statement, Senator Shaheen?
    Senator Shaheen. Right, that is fair.
    Chairman Risch. As you know, October is National Women's 
Small Business Month, which serves as a great reminder that 
female entrepreneurs own more than 11 million businesses in our 
country and employ more than 9 million workers. They contribute 
$1.6 trillion in sales to our national economy and are capable 
of even more as the fastest-growing sector.
    Just a few weeks ago, SBA Administrator, Linda McMahon, 
joined me in my home state of Idaho, where we visited a number 
of small businesses in the Treasure Valley. My wife and I and 
she traveled to a number of businesses and had the opportunity 
to listen to women-owned businesses there.
    I often say that entrepreneurs and small business owners 
want more than anything just to have time to devote to growing 
their businesses. Women entrepreneurs, as many of you can 
attest to, oftentimes are working to juggle even more 
priorities than their male counterparts, for obvious reasons, 
and they are negatively impacted by the expense of time and 
resources that it takes to comply with our complicated and 
burdensome tax code, along with a lot of the other arcane 
regulatory systems.
    It is for this reason that tax reform can and should be 
part of today's discussion. In fact, the National Association 
of Women Business Owners asked this Committee to present on tax 
reform at their annual conference just last week, because that 
is the most important issue to the hundreds of women business 
owners who belong to that organization.
    Additionally, the president and board of directors of Women 
Impacting Public Policy were at this desk, in this very room, 
just a few weeks ago, for a bipartisan discussion centered on 
the need for tax reform, with staff from both my office and my 
colleague, Senator Shaheen's office, to participate.
    Our hearing today will touch on many issues affecting women 
entrepreneurs, but I want you to know, this is a--that tax 
reform is a top-rung issue I believe on all of our parts.
    Again, thanks for being here today and I look forward to a 
robust discussion. I ask you, each of the panel members--first 
of all, thank you for bringing--for coming to the hearing today 
and presenting for us. I would ask you to try to stay within 
five minutes and I will ask that you submit anything that you 
want in writing and we will certainly include it in the record.
    So with that, I yield to Senator Shaheen.

OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, AND A 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Well, thank you very much, Mr. Chairman. I 
am delighted that we are holding this hearing this morning, 
because, as you point out, women-owned firms are significant as 
we look at the future of employment in this country. They are 
growing five times faster than the national average. But women-
owned businesses still face headwinds. On average, they earn 
less than male-owned firms. They employ only eight percent of 
the nation's private workforce and they produce 4 percent of 
business revenues, a share that has remained the same for the 
past 20 years.
    So the question really is: Why? Why are the other 
statistics around women-owned businesses not changing? That is 
one of the things we are going to explore this morning.
    I look forward to hearing the testimony of our outstanding 
witnesses and I will submit my full statement for the record, 
Mr. Chairman.
    Chairman Risch. Thank you very much, Senator. I would like 
to introduce our three witnesses here today and I would first 
like to welcome Ms. Elizabeth Gore, who is an Entrepreneur-in-
Residence--I have never heard that title before. I am sure you 
will enlighten us on that--who drives initiative in support of 
Dell's goals around helping small and medium businesses scale 
and prosper. I am also pleased to welcome Tracy Chadwell, 
Founding Partner of 1843 Capital, an early stage venture 
capital fund. And I would also like to recognize Michelle 
Richards, who has served as the Executive Director of the Great 
Lakes Women's Business Council. We all know the council does 
great work and she has been there since its inception in 1984.
    So I thank all of you for coming and, Ms. Gore, we will 
start with you.

 TESTIMONY OF ELIZABETH GORE, ENTREPRENEUR-IN RESIDENCE, DELL, 
                           SONOMA, CA

    Ms. Gore. Great. Well, thank you, Chairman. Thank you, 
Senators, for being here. Senator Shaheen, Senator Risch, and 
all of you, it is a real honor to testify about what I think 
can be the greatest bipartisan opportunity that this country 
has seen, and it is women entrepreneurs.
    Just this week I have been in San Francisco; Sioux Falls, 
South Dakota; New York City; and now, D.C., and I am proud that 
Northern California--and I can tell you that women, in all of 
those areas, have the most potential to succeed, but they are 
facing numerous barriers.
    While we are starting businesses twice as fast as our male 
counterparts, as you said--I am very proud of that--we do have 
considerably higher fail rates. And only 2 percent of us are 
making over $1 million with our businesses in this country, and 
I think that is a 98 percent opportunity that we all have to 
improve.
    I hope none of you have the number seven as your favorite 
number, because for some reason we are stuck on seven. Women 
founders only get 7 percent of venture capital in this country, 
only 7 percent of venture capitalists are women, and something 
that is increasingly important, only 7 percent of stories in 
business media are about women founders. So we have to see it 
to be it, and we have to change that.
    Over the last two and a half years, I have had the great 
pleasure to serve in my home State of Texas as the 
entrepreneur-in-residence at Dell, and I am also an 
entrepreneur myself and a co-founder of Alice, which is the 
first-ever machine-learning and AI tool that helps any women, 
minority, or veteran founder find these resources they need to 
scale. And I will tell you that through both those works I have 
found that the barriers really fit in four pillars: access to 
capital, networks, technology, and talent. Those really are our 
barriers.
    So I will just start with access to capital. This is the 
number one issue facing women, in my opinion. Whether I am in 
Sioux Falls and I am applying for an SBA loan or I am sitting 
in Silicon Valley, going after my Series A funding, this is a 
major problem. I think we need, as a recommendation, to 
incentivize our venture capital friends to increase that 7 
percent number. It is going down, in fact. It has gone down 
substantially and I think the 2017 numbers are going to show a 
significant drop in venture capital. I think my colleague here 
will talk a lot more about that.
    Bias and unconscious bias does exist in venture capital. 
The MeToo movement is not just about Hollywood.
    I would also like to encourage our SBA to continue to 
strengthen. The SBA is a critical part of our country. While 
women are five times likely to get SBA loans that shows how 
important it is, they are actually--the amounts they get are 
two and a half times lower than their male counterparts, so 
something I hope we look into.
    Another thing is certifications. I am really proud to see 
continuing biodiversity programs, women-owned business 
certifications, but there is one thing that we need to change--
the 8(a) certification program with the U.S. SBA is an 
excellent program. However, if you get venture funding and 
those venture capitalists are male, you are not considered 
women-owned anymore, so you cannot get the 8(a) certification 
and be venture-backed. I think this is something that we can 
simply change through legislation and that is my top 
recommendation for this year.
    The second is, let us continue to work with innovators and 
understand new sources of funding. Supplier diversity--Dell 
spends $4 billion a year in women- and minority-owned 
businesses, just through our supply chain. Crowdfunding that 
did not even exist seven years ago is now actually supporting 
women more than men. So what other innovative sources can we 
do?
    Most women actually depend on banks for access to capital. 
We talk about venture but 90-plus percent of women are counting 
on bank loans, and just this year we came out to see that only 
30 percent of companies owned by women were able to get bank 
loans in the first part of 2016.
    The next is access to networks. You know, we do not golf as 
much as our gentleman counterparts do, so what are those 
facilitated networks that we need to find, whether those are 
digital, whether accelerators are really critical. I love the 
grants that have been going to accelerators from the U.S. 
government. They are very important.
    Access to technology. Every single company is now a 
technology company. Women are less likely to access technology 
and we have to continue to move that forward.
    So on behalf of my fellow amazing women entrepreneurs, this 
is a time of opportunity, it is a time that, yes, we are 
challenged, but we are the best economic bet. If we get the 
access to capital that we need, we will bring $30 billion in 
GDP to this country in one year.
    Thank you. Thank you, Mr. Chairman.
    [The prepared statement of Ms. Gore follows:]

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    Chairman Risch. Ms. Chadwell.

 TESTIMONY OF TRACY CHADWELL, FOUNDING PARTNER, 1843 CAPITAL, 
                         GREENWICH, CT

    Ms. Chadwell. Thank you, Elizabeth. That was terrific.
    Good morning, ladies and gentlemen of the Senate Committee 
on Small Business and Entrepreneurship. Thank you, Chairman 
Risch and Ranking Member Shaheen, for the opportunity to 
testify today before your Committee. It is a pleasure and an 
honor to introduce myself and to give my perspective on how to 
strengthen the entrepreneurial ecosystem for women.
    By way of background, I am an attorney who had my first 
exposure to private equity when I worked for Senator Adlai 
Stevenson's SCM international and helped him set up a fund to 
invest in China. I eventually became a partner of a billion-
dollar growth capital fund, Baker Capital, but much more 
relevant, for the last five years I have been investing 
exclusively in women founders in the technology area, and I 
have founded a venture capital fund called 1843 Capital.
    1843 Capital is the year that Ada Lovelace wrote the first 
computer program. My partners in 1843 are incredible women. 
Alison Andrews Reyes is an operator and engineer who 
successfully built and sold her own cybersecurity company 
called Vigilant. Vanessa Dawson is the CEO of the Vinetta 
Project, a women's entrepreneurial platform that operates in 
seven cities in North America, delivering educational 
programming and premium networking for women founders, funders, 
and community partners. 1843 and Vinetta Project are strategic 
partners in the effort to scale women businesses and fund them.
    The good news--the really good news--is that things are 
working. The accelerator programs, mentorship, and seed 
investors in the ecosystem are allowing women-owned businesses 
to thrive. The Vinetta Project alone sees over 2,000 female-
founded companies per year. Through their events, they have 
been able to channel $50 million in seed-stage capital to early 
stage companies. As you said earlier, nationwide, women-owned 
businesses are growing in number, at five times the national 
average, and statistically, women outperform as well. Women-
operated, venture-backed tech companies achieve 12 percent 
higher revenues.
    This is in no doubt due to public-private partnerships. 
Organizations like the women's business development councils 
around the country have been a true catalyst. The SBA has been 
a strong partner has well. By guaranteeing loans, they are 
giving women the fuel they need to scale their businesses, and 
they are doing this without taxpayer subsidies.
    As a venture capitalist, I have had the opportunity to 
invest in world-class companies founded by women, that are both 
successful, and great things do great things for the world. 
Beautycounter is a woman-founded company which produces 
personal products for care that are free of toxic chemicals. 
This company has revenues that are much stronger than most of 
the unicorns out there and they employ 35,000 consultants.
    Silvernest is a company in Colorado that uses technology to 
match people over 50 with roommates. This helps them solve the 
problem of financial insecurity and loneliness.
    Marstone--really interesting--is an algorithm-based wealth 
management platform. This helps banks and registered investment 
advisors democratize wealth management, so that everyone can 
save and invest, regardless of the size of their accounts.
    Something truly unique about Marstone is what we call user 
experience. Most people are intimidated by math and finance and 
the thought of diversified portfolio, but Margaret Hartigan 
knew this and she developed an interface that was visual, 
intuitive, and accessible to everyone, a great example of why 
women founders are successful. She knew that to have this 
biggest impact, the company had to have a foundation in design. 
As we move into our next chapter in technology dominated by 
artificial intelligence, the skills of coding or writing 
algorithms are going to become commodities. What is going to 
win is creativity, design, and sales and marketing.
    But by far the most serious barrier to the entrepreneurial 
ecosystem for women is the lack of funding, as Elizabeth said. 
Women are able to create businesses now because the cost of 
starting a business has come down exponentially and they do not 
need outside investment to get started. However, the capital to 
scale is inaccessible.
    Beautycounter is one of the largest and fastest-growing 
companies, period. They had difficulty raising institutional 
capital until they reached $20 million in revenues. Women 
founders, as a group, received 2.19 percent of venture capital 
dollars. A lot of reasons for this exist, including some 
unconscious bias and lack of women as venture partners. Women 
venture partners comprise 3 percent and women-founded venture 
capital firms are 28 out of 800 firms.
    One of the most impactful things that you, as Senators, 
could do would be to encourage your State pension funds to just 
take a harder look at women managers and a harder look at the 
diversity of their underlying portfolios. It is impossible to 
legislate against unconscious bias. However, it is possible to 
support and to fund positive role models.
    Thank you very much.
    [The prepared statement of Ms. Chadwell follows:]

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    Chairman Risch. Thank you very much.
    Ms. Richards.

TESTIMONY OF MICHELLE RICHARDS, EXECUTIVE DIRECTOR, GREAT LAKES 
             WOMEN'S BUSINESS COUNCIL, LIVONIA, MI

    Ms. Richards. Thank you, Chairman Risch, Ranking Member 
Shaheen, and distinguished Senators.
    Senator Kennedy. I do not think your mic is on.
    Ms. Richards. Oh, I am sorry. I am really bad at the 
technology, the audio part. I am right on point.
    My name is Michelle Richards and I am the Executive 
Director for Great Lakes Women's Business Council.
    Now before I discuss the current ecosystem for women 
entrepreneurs I want to share our experience as an organization 
dedicated to supporting women business owners for the past 33 
years.
    I had a chance to start this organization, and as an SBA 
microlender since 1993, we have made over $6.5 million in 
loans, with the average size of $20,000. These loans have 
created 1,700 jobs.
    In the early 1990s, we became an SBA Women's Business 
Center. This was important because it created a stable funding 
for us to build a platform for our training and counseling 
program. And we have been able to serve more than 10,000 women 
business owners and entrepreneurs with it.
    For the past 20 years, we have also been a certifying 
partner for the Women's Business Enterprise National Council, 
also known as WBENC. We currently have 1,120 certified women 
business owners that generate $12.3 billion in revenue annual 
and employ 48,500 U.S. workers. Amazing.
    I am proud of our efforts to revitalize Detroit. To date, 
our Detroit loan program has provided $1.3 million in loans, 
creating 72 jobs and retaining 100 more.
    For small businesses to succeed, they need what I call the 
Three C's--capacity, capital, and customers or contracts. In my 
view, women entrepreneurs lack access to all three. Capital 
access is a chronic barrier for women business owners. Our team 
has heard countless stories of the bias against women when they 
attempt to obtain business finance.
    I recently was told by an established woman business owner 
that a bank lender came out to her business and asked if her 
husband would be joining them. When she indicated that he would 
not be attending because he is not part of the business, the 
lender immediately left, closed his padfolio.
    These anecdotes are backed by statistics compiled by this 
Committee and the SBA. If women are not able to obtain equal 
access to capital, they cannot grow their business to full 
potential.
    Similarly, women are highly underrepresented in Federal 
contracting. Now although the Federal Government met its goal 
of awarding 5 percent of eligible Federal contracts to women-
owned businesses in 2015, it failed to reach the mark in 2016. 
The market share needs to grow because Federal contracting has 
a tremendous impact on many women-owned businesses.
    For example, Katie Bigelow, just one of the many examples 
we have, President of Mettle Ops, received her first contract 
with the Air Force for $80,000 in 2015, after two years of 
trying. That contract created the past performance needed to 
win her most recent contract award for $9.1 million.
    Finally, women are not able to access basic tools that we 
need that we know work for them. They need training and 
coaching to grow their businesses and become job creators, and 
it is important to modernize and grow a nationwide network of 
counselors and mentors for women entrepreneurs. As an SBA 
women's business center microlender and WBENC certifying 
partner, Great Lakes WBC has experience to offer the Committee 
these recommendations.
    First and foremost, we need to modernize the Women's 
Business Center program. The House of Representatives included 
the Women's Business Center legislation as part of the fiscal 
year 2018 National Defense Authorization Act, which would 
increase the 30-year-old cap on grant levels--30 years. We 
strongly urge the Senate to keep this provision in the NDAA.
    Second, I encourage this Committee to push SBA on its 
implementation of women-owned, small business, third-party 
certification rules. We have over 500 WOSB-certified women in 
our center.
    Finally, there should be a dedicated commitment to programs 
that are proven to provide capital to women business owners. 
Congress should continue to support programs like the Small 
Business Microloan program and the Community Development 
Financial Institution Fund.
    Chairman Risch, Ranking Member Shaheen, and distinguished 
Senators, thank you for this opportunity to present this 
testimony.
    [The prepared statement of Ms. Richards follows:]
 
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    Chairman Risch. Well, thank you so much to all three of 
you. I noted that all three of you made reference to the 
capital situation and the access to it, and those figures 
certainly are not pretty, as far as the capital that is 
received by women entrepreneurs. We all--anybody who has even a 
passing knowledge of economics knows that access to capital and 
free flow of capital is absolutely critical to the success of a 
family, of a business, and, indeed, of a nation, and that is 
why America stands out so much from others in our economies, 
because of the free flow of capital. Barriers in that regard 
really need to be knocked down.
    I note, Ms. Gore, you are finding a flaw in the Federal 
system where women-owned, AA certification is lost when they 
get funds from a male entrepreneurial--excuse me, male venture 
capital fund. It would be interesting to see what would happen 
if they found out that the banks that the women-owned 
businesses were getting money from was run by an all-male board 
of directors, which is exactly the same situation. Senator 
Shaheen and I have already agreed that we are going to take a 
run at this. Federal Government does not always--and that is a 
result of your testimony, by the way--the Federal Government 
does not always do things exactly the way they should. But that 
is why we are here so we will take a run at that for you.
    Ms. Gore. Thank you.
    Chairman Risch. So with that, Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman, and I hope all of 
the Members of the Committee will join us in that effort, 
because it seems like that is a no-brainer that would make a 
big difference in access to capital.
    I want to go back to an issue that Ms. Richards referenced, 
and I think you did as well, Ms. Chadwell, in your discussion 
about venture capital. Right now the country is having what I 
think is a very important conversation about sexual harassment 
in the workplace, and fortunately a lot of people are coming 
forward and saying this is not right.
    Unfortunately, we have seen that in terms of access to 
venture capital as well. Earlier this year, several female 
entrepreneurs told The New York Times about unwanted sexual 
advances made by influential venture capitalists. Last week, 
the founder of Rent the Runway, Jennifer Hyman, discussed the 
harassment she experienced while raising $190 million from 
venture capitalists.
    So, clearly, this is something that exists in the venture 
capital industry as well, and I wonder, Ms. Chadwell, if you 
could talk about this a little bit. Are experiences like Ms. 
Hyman's commonplace, and how do you see trying to address this 
issue?
    Ms. Chadwell. I think experiences like this are commonplace 
in every industry. I think we have been seeing it in the 
entertainment and the venture capital industry specifically as 
of late, but I think it is systemic, and I think that a lot of 
issues like this will go away as we get closer to parity, where 
we have more women CEOs, and where we have more women venture 
managers. And not just the sexual harassment issue, but we have 
other issues that we are working on as well, like equal pay, 
and also maternity and family leave issues. A lot of those may 
not have to be legislated if you have women CEOs.
    Senator Shaheen. Thank you. Do either of you want to add 
anything to that?
    Ms. Gore. The only thing I will add is--thank you--is, 
unconscious bias is so strong, and there are a lot of formulas 
that have worked over time. And when your formula is working 
and you are making money it really takes leadership from folks 
like you all to push those industries to think outside.
    I hear--when I was raising money the last few years I heard 
over and over that anything that is women-focused is not a 
large enough market. It is a niche market, even though we are 
51 percent of the population and had 85 percent of consumer 
spending.
    So I think that bias is pretty rampant.
    Senator Shaheen. Well, thank you, and I want to go back to 
access to capital as well. We have a chart here that shows what 
all of you pointed out, in terms of the situation with women-
owned businesses and their access to capital. So you can see, 
the blue columns are majority women owned, and all other firms 
are the orange columns.
    So we can see the difference in terms of venture capital 
funding, the total amount of conventional business loans, and 
in the prime contract awards. This is exactly what all of you 
had to say, but when you see it on that chart it really brings 
it home, just the disadvantages that women-owned businesses 
face.
    So, Ms. Richards, you told a story that actually reminded 
me a little bit of my own experience, about the entrepreneur 
who was turned away because her husband was not there. I 
remember when I first was applying for credit my husband had to 
sign the bank forms in order to do that, because we had not yet 
changed the laws.
    So how do we continue to address these issues, and what 
steps--what other steps can we take to prevent instances of 
bias by bank lenders against women business owners?
    Ms. Richards. Disclosure is critical. So 1071 of the Dodd-
Frank Act requires data to be collected on women- and minority-
owned businesses and the loans made to them. Until we can start 
quantifying, really, the discrepancy, instead of just using 
anecdotal information, we are not really going to be able to 
get to some of the roots of it.
    Small business lending is, in so many ways, different than 
all of the other bank lending because it is not solely numbers-
driven. There are so many elements of it, and lenders decide if 
they want this business and this loan in their portfolio. So it 
is very different. So we need to start creating some parameters 
and implement 1071 of the Dodd-Frank Act. Thank you.
    Senator Shaheen. Thank you. Thank you, Mr. Chairman.
    Chairman Risch. Thank you, Senator Shaheen.
    Senator Ernst.
    Senator Ernst. Thank you very much, Mr. Chair, and thank 
you, Ranking Member Shaheen. I appreciate it.
    The conversation has been striking this morning, and even 
as a woman I just--I shake my head when I hear about the lack 
of access that is available out there.
    I do want to go back to something that Senator Risch had 
mentioned earlier in our conversation as we were focused on tax 
reform. So earlier this week, a woman from Hamilton County, 
Iowa, who owns a small business, reached out to me about the 
importance of tax reform, and like many of the small business 
owners that I have had the opportunity to interact with and 
speak with as I am out doing my 99-county tour, she said the 
biggest two obstacles that she has, for her small business, are 
the high taxes and the regulations. So, really, two burdensome 
areas for her. And today her marginal tax rate and for other 
small business owners they can get as high as 45 percent on the 
small businesses, and the average small business owner spent 
over $12,000 annually just in dealing with regulations.
    So just for all of you, are current tax policies hindering 
entrepreneurship, and what impact would lower tax rates for 
small businesses have on strengthening the entrepreneurial 
ecosystem for women? If any of you, if you could----
    Chairman Risch. Jump ball.
    Senator Ernst. Yes.
    Ms. Gore. Thanks for the question, Senator. I will just say 
there is no entrepreneur who would say no to lower taxes, so I 
think that is men and women, no matter where we are.
    One thing I will flag that I do not think we have brought 
up today, and I know there is a lot of discussion around child 
tax credits and so on, that something very specific, when you 
put a gender lens on entrepreneurship, is child care. And I 
have a three-year-old and a six-year-old and I have to make 
very hard and strong decisions about--as an entrepreneur, that 
is my number one cost. And so I think anything we can do to 
release that burden for mothers. The majority of women 
entrepreneurs do have children, and they are either doing 
children's care or elder care or caring for their community. It 
is just a disproportionate thing about women.
    So that is one area I wanted to bring up in response, is we 
need to be thoughtful and creative about how do we let women be 
great moms but also be killer entrepreneurs.
    Senator Ernst. I love that, and that is something that we 
are having discussions about as well, because it is truly 
important, especially as we want to get more women involved in 
small businesses and other activities as well. So thank you. 
Anyone else?
    Ms. Chadwell. I think in terms of regulation, the really 
tough thing that I see is in the commerce space. So when tech 
companies are setting up and they are trying to set up across 
the country they have to register in each State separately, 
which is a big hindrance for both male and female companies.
    Senator Ernst. Very good. Thank you.
    Ms. Richards. Of course, we want to relieve any pressure on 
our small businesses, and since women cash is a real 
consideration. It is a real consideration with the taxes, too.
    Senator Ernst. Okay. Thank you. And today my colleague, 
Senator Heidi Heitkamp and I will be introducing the Prove It 
Act, which seeks to strengthen the voice of small businesses in 
the rulemaking process, and improve the quality of agency 
certifications and analysis of a rule's impact on small 
business. Do you think providing greater accountability for 
agency certifications would improve the rulemaking process and 
provide some regulatory relief for small businesses? Any 
thoughts on that?
    Ms. Gore. Well, thank you, Senator. One thing I will say is 
we are in a digital era, and one of the things that we can do 
is digital transformation around all of how do we regulate, how 
do we apply for everything from loans for certification, even 
to our local permitting. So one of the things I would really 
encourage is how do we look at using digital for all these 
processes to speed things up, because entrepreneurs are more 
time-poor, even, than money-poor, most of the time, and then 
also to lower those regulation barriers. I love the idea of 
having one registration instead of all 50 states.
    Senator Ernst. Yeah, very important. Use technology.
    Ms. Gore. Yes.
    Senator Ernst. Anything else?
    [No audible response.]
    Okay. Well, with that I will yield back my time. Thank you.
    Chairman Risch. Thank you so much. Before I turn to Senator 
Coons let me tell you, Ms. Gore, that your--the issue you 
raised, that we had not touched on, I can assure you that that 
matter is under serious consideration. As you know, over the 
last, what, few weeks, we have been focused on tax reform, and 
I, like my colleagues, have been to lots and lots of meetings, 
and I cannot think of one where that issue was not seriously 
put on the table and discussed as to how that piece of the 
puzzle would fit in. It is going to be a very complicated 
puzzle to put together but it is seriously being discussed 
here. So thank you so much.
    Senator Coons.
    Senator Coons. Thank you, Chairman Risch, Ranking Member 
Shaheen, and thank you to all of our witnesses today who have 
testified about the range of ways in which we can and should be 
more strongly supporting women entrepreneurs. It is striking, 
as graphically represented by Senator Shaheen in a chart, of 
the disconnect between the very strong performance of women 
entrepreneurs and women-owned businesses and yet the 
significant structural challenges in accessing capital, in 
building out networks of mentors and advocates, and, in 
particular, in accessing Federal contracting.
    As a Senator now for seven years and a local elected for a 
decade before that in the local business community, I have been 
struck at how capable and strong women entrepreneurs are in my 
home State. Fulcrum Pharmacy, for example, Christy Crkvenac 
founded in Wilmington, Delaware. It is a specialty pharmacy. 
7(a) financing, and SCORE mentoring played a key part in her 
taking the leap and being successful as a pharmacist.
    Mountain Consulting is in our State capital in Dover. Very 
successful, minority- and women-owned business that does land 
survey engineering, technical services. Kim Adams is the 
founder, first HUBZone certified small business in Delaware and 
also benefited from SBA loan products.
    Twist Juice, one of my favorites, is a premium juice bar in 
downtown Rehoboth Beach, probably frequented by some of the 
many folks here who like to go to Delaware's beaches, or if 
they do not, they should, and they tell me that SCORE 
consulting helped develop the business plan and do market 
research.
    I am the Ranking Member of the Appropriations Subcommittee 
that funds the SBA, so I am particularly interested in hearing 
from you about the SBA funds for Women's Business Centers and 
mentoring through SCORE and through SBA offices and other 
programs. So let me just touch on those if I could.
    I have worked to increase SBA's WBC funding by about 20 
percent since 2015--I knew I would get a smile for that--and I 
think they are a very important network across the country that 
helps address access to capital and mentoring and business 
planning. So I would be interested in hearing from all of you 
about what your views are about WBCs, whether they are 
genuinely accessible, whether they are relevant, and whether 
they are important in terms of a network.
    And then, second, the networking that you spoke to, the 
need for mentorship, SCORE, I think, does a great job in 
Delaware but I am not sure if that is the case nationally. In 
Delaware, there is an innovative program called WeTHINK, a 
partnership between SCORE and the Delaware SBA office that 
provides year-long mentoring for women entrepreneurs, to tackle 
some of the challenges that may be specific to trying to 
balance family commitments and obligations and new markets and 
being a successful entrepreneur.
    I would be interested in comments from all three of you, if 
I could, on those two core questions.
    Michelle.
    Ms. Richards. Yes. So two key pieces. One is that the 
mentoring is really critical. One of the things many of the 
Women's Business Centers do is use other women business owners, 
because there is a real clear connect between them. That is a 
unique element of why you have a Women's Business Center, too.
    Secondarily, the Women's Business Centers, with--because we 
have had a 30-year cap, it is not that it is the same money 
because 30 years ago it was different money. It was a different 
amount. And so we are basically being squeezed to provide as 
many services in higher levels for the same dollars that were 
30 years ago. And for the centers who are really excelling, 
this is an opportunity for us to push forth the same kind of 
programming to more women. It is an opportunity of growth for 
this country.
    Ms. Chadwell. I know the Women's Business Development 
Corporation in Connecticut has been extremely successful in 
building community and mentorship and providing education for 
women. Where, again, I see the real lack is in capital, and I 
know the SBA has been very successful in providing debt funding 
for women, and for some small businesses that is appropriate 
and for some core businesses, like consumer products that have 
capital and balance sheets that they can leverage against, that 
is appropriate.
    But for the fastest-growing companies and the ones that are 
creating the most jobs in this country, really the only viable 
form of financing is equity. So I do not know if there is some 
sort of equity financing that is part of the SBA or is being 
contemplated, but I would highly recommend it because that is 
where all the growth is.
    Senator Coons. Thank you.
    Ms. Gore. Four thoughts on the SBA. Thank you, Senator, for 
the question because I am an ardent believer in the SBA. The 
first is where there are local SBA offices women seem to really 
have a connection and understand the SBA more. So in Sioux 
Falls, where I was on Tuesday, the SBA office was actually in 
the local accelerator, and people just understood it more, had 
better relationships. So I really think those local offices are 
quite powerful.
    The second is, if I could improve the SBA, is we have got 
to streamline the process of application, make it easier, make 
it faster, and make it just like any other Silicon Valley 
startup--how do you use digital to make it more efficient? And 
that would actually probably save the SBA money in the long 
term with efficiencies.
    The last is, as I said at the beginning of my testimony, 
most SBA loans are 2 percent lower for women than men, and I 
would love to dig into that and just see why, because it is a 
critical source of capital for women.
    And the last is the SBA's reputation. I really think the 
country can get a better understanding of the SBA and its 
value. Sometimes, in New York and San Fran, an SBA loan is seen 
as your company is not going to thrive, sometimes, and I do not 
think that is the case. So as we can educate the masses more on 
the power of the SBA and how to use it, I think it will become 
even more powerful.
    Senator Coons. Well, thank you all. I realize I am out of 
time but I am particularly passionate also about trying to make 
sure that we are transparently reporting on what is happening, 
that we are hitting the contracting cap and exceeding it, and 
that we continue to engage Community Development Financial 
Institutions, or CDFIs. One of the most effective WBC 
affiliates is a CDFI in Delaware. They make great loans and 
they are very engaged and they are very well known.
    So thank you for the testimony. I look forward to following 
up with you.
    Ms. Gore. Thank you.
    Chairman Risch. Thank you, Senator Coons.
    Senator Kennedy.
    Senator Kennedy. Thank you, Mr. Chairman. Good morning. I 
appreciate your testimony, from all three of you.
    In terms of the gender bias and access to capital, you 
mentioned conscious and unconscious. I would like to ask each 
of you, what percentage, roughly, do you think is conscious and 
what percentage is unconscious?
    Ms. Gore. Since the Astros won last night, sir, I will be a 
little bit more bullish. Thank you, Senator, for the question. 
I actually think the majority--this is a personal opinion--is 
unconscious. I am optimist in this world and I also have really 
spent time in the venture community, and I think they are 
mostly good people. However, the formulas to make money have 
worked in an old system, and the systems just have not caught 
up to the amount of women who are now pitching.
    So I would say the majority is unconscious, and there are 
ways of training around that. There is a marked training that 
is incredible that Catalyst does, that I think if everyone sat 
through it we would see change.
    Thank you, Senator.
    Senator Kennedy. Ms. Chadwell.
    Ms. Chadwell. I think that is impossible to quantify, but I 
know that it exists. I think probably the biggest issue is 
networks and having access, because people are comfortable 
doing business with people that they know, and some people say 
we will not even invest in someone that we do not already know.
    But I do know that there was a study done by Harvard and 
MIT together that had both a man and a woman present identical 
business plans, and the woman was 40 percent less likely to get 
funded. That is with an identical business plan. So it does 
exist.
    Senator Kennedy. Okay. Ms. Richards.
    Ms. Richards. I concur with your comments on there. I think 
that, again, we cannot quantify. There is not a way for us to 
quantify which is conscious and unconscious, but what I think 
is critical is that if we have mechanisms to count the 
behaviors in the lending community it gives us an opportunity 
to create some policies around goals and performance that helps 
to change behaviors, and that is the best that we can hope to 
have happen.
    Senator Kennedy. Can you explain what you mean by that?
    Ms. Richards. Certainly. So if we had implemented 1071 
Dodd-Frank Act and we had collected and knew definitively where 
only 4 percent of the loans were being given to women--here, 
here, and here--we said that this is not representative of the 
business community of the population-at-large and it 
theoretically should be higher, as we have with Federal 
Government contracts that at least 5 percent go to women. And 
then programs are in place to ensure--policies come about to 
ensure that you at least meet these numbers. So what it does is 
it takes it away from the individual's personal conscience.
    Senator Kennedy. I get it. Yeah. I appreciate it.
    I want to follow up on Senator Shaheen's excellent 
questions. The three of you are obviously--I mean, I have 
looked at your resumes--you are obviously experienced, 
successful, accomplished, a lot of success in life. Have you 
ever witnessed sexual harassment in the workplace?
    Ms. Chadwell. I not only have witnessed it, I have been a 
victim several times, and have made the decision to go forward 
in my work and to become a role model, rather than stop and 
take a sidetrack. But in some cases, I regret that, because 
maybe perhaps if I had spoken up at the time, change could have 
happened more quickly.
    Senator Kennedy. Do either of you care to add to that?
    Ms. Richards. I would say the same. I have seen it with 
other women and I have had experiences myself.
    Ms. Gore. I have seen it and not experienced it, but being 
there everyone experiences it.
    Senator Kennedy. Yeah. Well, Ms. Chadwell, I mentioned that 
it is not limited to the entertainment industry. I mean, we 
just saw today that apparently a well-known journalist, Mr. 
Mark Halpern, apparently is a pig as well. You know, five 
allegations that he has admitted to. Do you think that is 
related to the access to capital at all?
    Ms. Chadwell. I think that whenever you mix power with 
women and men, you have issues, and I think the most effective 
way to do this is to have both women and men sitting at the 
table when making decisions about access to capital.
    Senator Kennedy. All right. Thank you very much for your 
testimony. I learned a lot. I appreciate it. Thank you, Mr. 
Chairman.
    Chairman Risch. Thank you.
    Senator Hirono.
    Senator Hirono. Thank you, Mr. Chairman. Senator Kennedy, I 
can tell you, without any reservation, that sexual harassment 
and more is not limited to just the entertainment industry. 
Most women who have been doing anything in the workplace or 
otherwise, or in school, et cetera, have faced these kinds of 
issues.
    I have been particularly interested in STEM for women. This 
is a question for you, Ms. Chadwell. Last fall I spoke at the 
Innovation Alliance's event on ``Closing the Patent Gender 
Gap,'' where findings from the Institute for Women's Policy 
Research revealed the alarmingly low number of women patent 
holders in the U.S. In 2010, women held only 18.8 percent of 
all patents, and while the number of women with patents has 
steadily grown since 2000, at the current rate of progress the 
IWPR, that's the research entity, projects that the gender 
equality among patent holders would not occur until 75 years 
from now, in the year 2092. Most of us will probably not be 
around then.
    So in your testimony you mentioned that entrepreneurs with 
a background in artificial intelligence, coding, algorithms, 
and analysis will have a competitive advantage in the coming 
years. So how can we expand the opportunities for women and 
minorities--and I include minorities because they are also 
vastly underrepresented--in these and other science, 
technology, engineering, and STEM fields, and assist them in 
obtaining patents? And the more particular you are, specific 
you are as to what we can do, the better.
    Ms. Chadwell. First of all, I think there is some good news 
and bad news. The bad news is that the numbers are going down, 
in terms of----
    Senator Hirono. And they drop out from the STEM arena in 
all levels, including really early on--intermediate, you know, 
and beyond.
    Ms. Chadwell. Absolutely. I think this is back to 
messaging, which we talked about earlier. I think it also--
another thing I did mention is that with coding and algorithms 
becoming more commoditizing--commodities, that we are going to 
be reaching into things that women are traditionally, just have 
been in the past not as a total group but some members are very 
effective at innovation and very effective at design and very 
effective at sales and marketing. So I think that those could 
be places where women will have advantages.
    Also, too, in terms of patents, I would like to say I do 
not back patentable technology anymore. What I like to back is 
innovation and the ability to iterate over and over and over 
again. Because by the time you get a patent, with a lot of this 
software, it is already irrelevant. So, really, what we need to 
continue to do is to teach our children to be creative and 
innovate.
    Senator Hirono. Well, what are some very specific ways, 
though, that we can teach children to be creative and 
innovative? Are there any models out there of where there has 
been success in encouraging more women and minorities to go 
into these fields and to stay in these fields? You are nodding 
your head. Would you like to respond?
    Ms. Gore. Yes. Thanks, Senator. One of the things that I am 
very optimistic about is what are already very established 
girls' organizations. I am a 4-H kid. Girl Scouts are actually 
putting STEM into their programs. I think it is hard these days 
and age to create a whole new organization, so those that are 
already out there, including public education, having STEM 
programs very early--third, fourth, fifth, sixth, seventh 
grade, before that seventh-grade drop happens, is what I love.
    So you see there is now a STEM badge for the Girl Scouts, 
which I love, and I think those are critically important. So 
let us get them into institutions that are already thriving and 
large, and ensure that this is part of the vernacular.
    Senator Hirono. Well, okay, that is great. Not everybody 
gets to be a Girl Scout. I certainly was not. But I am looking 
at where arenas where the kids are there, i.e., in our schools, 
what are we doing in our schools in terms of curriculum that 
supports minorities and women, girls, going into these areas?
    Ms. Gore. Thank you. We have to have--first of all, we have 
to have Wi-Fi in all our schools. We have to have access, 
broadband access particularly in rural communities in smaller 
states. There is no good program that is out there if we do not 
have kids have access to what they need to see. Second is the 
technology in those arenas. Is there something that children 
are touching, working on early on to learn to code, to learn to 
do these things?
    So I think that is the baseline, frankly, before we then 
can start looking into the best curriculums.
    Senator Hirono. Would the two of you agree that technology 
in our schools--because there are a lot of elementary schools 
all across our country, public schools that do not have access 
to this kind of technology. Would you agree that that is a 
really important foundation?
    Ms. Richards. Technology is critical. Mentors are also 
critical. We need to see women and minorities in those fields 
and as role models, so that they can desire to achieve those 
goals.
    Senator Hirono. I did introduce legislation that would 
encourage, through grants, et cetera, mentorships and other 
programmatic ways, institutionalized ways of focusing on women 
and minorities in the technology area and I hope that leader 
folks will take a look at that.
    And the whole question of, particularly, you know, women 
can be considered a minority, but within that category there 
are minority women who face even more challenges in terms of 
access to capital and all the other challenges that women 
generally face, and multiplied probably several times over for 
minority women. So I would be appreciative of any information 
that you have that relates to support for minorities.
    Ms. Chadwell. That is no question, and, in fact, women's 
access to capital at the minority level is 0.02 percent of 
total venture capital dollars, so it is even more severe.
    Senator Hirono. Yes. Thank you, Mr. Chairman.
    Chairman Risch. Thank you, Senator.
    Senator Shaheen.
    Senator Shaheen. Well, thank you, Mr. Chairman. I wanted to 
add that, as we are talking about how to get young women 
excited about STEM subjects, robotics competitions and out-of-
school competitions that focus on STEM are really great ways to 
do that. They reach not only young women but also often 
minorities in a way that they may not be reached in school.
    But I want to follow up on both the mentor piece and the 
comment that you made, Ms. Chadwell, about the media not 
covering women success stories. And what can we do to elevate 
those success stories for women, and how do we get reporters, 
actually, the media and--the news media is another place where 
women are underrepresented. So how do we get attention to those 
female success stories of women-owned businesses, for any of 
you?
    Ms. Chadwell. Well, I think one of the biggest success 
stories that we are seeing right now is the story on the IPO of 
the company Stitch Fix, which has a female founder. And, 
ironically, for a technology company, this company actually has 
profits, which is wonderful. So the more we can elevate women 
into these positions where they can be role models, and 
obviously representing really terrific companies, I think the 
more attention we will get from the media.
    Senator Shaheen. Do either of you, the other panelists, 
have any ideas for----
    Ms. Gore. I have a very specific idea, and I think that, 
you know, the 12 major business publications that range from 
Inc. and Fast Company to Fortune and Forbes, they could 
collectively make a commitment, publicly, and I encourage them, 
on the record, to do so, that at least 40 percent of their 
stories have some type of women founder in them. And that is up 
from 7 percent.
    Senator Shaheen. That is a great idea.
    Ms. Gore. And they are great stories. They are good 
content. And then we, as women, have to do better at raising 
our hands and really boasting about those successes. But there 
is no longer the lack of great companies, which is really 
exciting, but I would encourage that level of commitment.
    Senator Shaheen. Ms. Richards.
    Ms. Richards. I would agree with that, and I would say that 
we have to remember that we are the consumers, and so part of 
it is that we need to send a message of what we want to consume 
from our media, and stop using it as being the one token female 
who has done this, because there are many, many great stories.
    Senator Shaheen. Well, thank you. That might be a place 
where the Committee could weigh in. What do you think, Senator 
Risch, where we could send this suggestion, on behalf of the 
hearing today, to a number of those publications?
    Chairman Risch. Yeah. I think that is something to talk 
about.
    Senator Shaheen. Good.
    Chairman Risch. Thank you.
    Senator Shaheen. Thank you all very much.
    Chairman Risch. Thank you. This is--you know, we sit 
through lots and lots of hearings and lots and lots of panels, 
but I can tell you that this was an impressive panel, and we 
sincerely appreciate you taking the time that you have taken to 
come and talk with us. We are--every one of us runs for public 
office because we want to make life better for our constituents 
and Americans, and these are the kinds of things that actually 
help us move forward in that goal. And, actually, we have come 
away with some really good, pragmatic suggestions that we can 
move forward. Notwithstanding what you hear about what Congress 
does not do, we do occasionally do something.
    Senator Shaheen. And we do it together.
    Chairman Risch. And we do it together, particularly on this 
Committee.
    So with that--first of all, Madam Chair--or, formerly Madam 
Chair--the chart. I think we ought to have that put in the 
record. Would you agree with that?
    Senator Shaheen. I agree. That is a great idea.
    Chairman Risch. All right.
    [The chart follows:]

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    And, secondly, I am going to declare the record will be 
open for two weeks, until 5:00 p.m. on Thursday, November 9th, 
for anyone to submit any relevant information for the hearing.
    And, again, thank you, and with that the Committee is 
adjourned.
    [Whereupon, at 11:59 a.m., the Committee was adjourned.]

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