[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
REVERSING THE DECLINE IN WOMEN
ENTREPRENEURSHIP: OPPORTUNITIES FOR
REBUILDING THE ECONOMY
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HEARING
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH, TAX, AND CAPITAL ACCESS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JUNE 15, 2021
__________
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-018
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-751 WASHINGTON : 2021
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Sharice Davids.............................................. 1
Hon. Dan Meuser.................................................. 2
WITNESSES
Ms. Sherry Turner, Executive Director, Kansas City Women's
Business Center, Fairway, KS................................... 5
Ms. Tammy Williams, Founder & Chief Executive Officer,
Envision2bWell, Inc., West Chester, PA......................... 7
Ms. Ayris T. Scales, Chief Executive Officer, Walker's Legacy
Foundation, Washington, DC..................................... 9
Ms. Natalie Buford-Young, Chief Executive Officer, Springboard
Enterprises, McLean, VA........................................ 10
APPENDIX
Prepared Statements:
Ms. Sherry Turner, Executive Director, Kansas City Women's
Business Center, Fairway, KS............................... 26
Ms. Tammy Williams, Founder & Chief Executive Officer,
Envision2bWell, Inc., West Chester, PA..................... 36
Ms. Ayris T. Scales, Chief Executive Officer, Walker's Legacy
Foundation, Washington, DC................................. 44
Ms. Natalie Buford-Young, Chief Executive Officer,
Springboard Enterprises, McLean, VA........................ 51
Questions and Answers for the Record:
Questions from Hon. Van Duyne to Ms. Sherry Turner and
Answers from Ms. Sherry Turner............................. 54
Additional Material for the Record:
None.
REVERSING THE DECLINE IN WOMEN
ENTREPRENEURSHIP: OPPORTUNITIES FOR REBUILDING THE ECONOMY
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TUESDAY, JUNE 15, 2021
House of Representatives,
Committee on Small Business,
Subcommittee on Economic Growth,
Tax, and Capital Access,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:01 a.m., in
Room 2360, Rayburn House Office Building and via Zoom, Hon.
Sharice Davids [chairwoman of the Subcommittee] presiding.
Present: Representatives Davids, Newman, Bourdeaux, Chu,
Evans, Mr. Kim, Meuser, Garbarino, Ms. Young Kim, and Van
Duyne.
Chairwoman DAVIDS. Good morning. I call this hearing to
order.
Without objection, the Chair is authorized to declare a
recess at any time.
Let me begin by saying by saying that standing House and
Committee rules and practice will continue to apply during
hybrid proceedings. All Members are reminded that they are
expected to adhere to these standing rules including decorum.
House regulations require Members to be visible through a
video connection throughout the proceeding, so please keep your
cameras on. Also, please remember to remain muted until you are
recognized to minimize background noise. If you have to
participate in another proceeding, please exit this one and log
back in later.
In the event a Member encounters technical issues that
prevent them from being recognized for their questioning, I
will move to the next available Member of the same party and
will recognize that Member at the next appropriate time slot
provided that they have returned to the proceeding.
For those Members and staff physically present in the
Committee room today, we will continue to follow the most
recent OAP guidance. I sincerely hope we all do our parts to
protect each other and our staff.
Women are at the center of the American economy. They make
up nearly half the workforce and own an estimated 42 percent of
all U.S. businesses. Before the pandemic, these women-owned
businesses employed 9.4 million workers and generated $1.9
trillion in revenue. Businesses owned by women of color were
experiencing exponential growth. Pre-COVID, firms owned by
women of color grew at 43 percent, one of the fastest rates
among all groups.
But the virus has caused a monumental setback to women's
careers, earnings, and the progress that has been made over the
past half century. The pandemic has been incredibly hard for
small firms, closing more businesses in 2020 than any other
year on record. As of May 2021, more than 37 percent of small
businesses have closed their doors.
Unfortunely, women-owned businesses have borne the brunt of
this economic devastation. Throughout the pandemic, female
entrepreneurs have been more likely to close their businesses
and report a significant decline in the overall health of their
companies.
COVID also dealt a severe blow to the progress that women
have made in the workforce. In just 2 months, from February to
April 2020, women lost a staggering 12.2 million jobs. Overall,
women lost their jobs at rates 24 percent higher than men.
Today, many have yet to start working again, working with 1.8
fewer women in the labor force than pre-pandemic. Simply put,
the pandemic was a travesty for women small business owners and
their female employees.
But disproportionate challenges are nothing new for female
entrepreneurs. There have long been numerous structural
obstacles facing women in areas pivotal to business success.
Women historically have a much harder time obtaining capital,
the capital needed to start and run a business. Only about 24
percent of small businesses' bank loans go to female
entrepreneurs. When women do obtain loans, the average amount
is 33 percent less than their male peers. This lack of access
to traditional lending forces women to rely on family
connections or self-finance their businesses.
Female entrepreneurs also have less access to resources and
support systems that can mean the difference between success
and failure for an enterprise. There is a strong relationship
between technical assistance, confidence, and a positive
success rate for small firms. Inadequate resources for core
support programs can hurt some women entrepreneurs who need
technical assistance and create more hardships for those
already struggling to gain business funding. A strong recovery
from this crisis will depend on helping female entrepreneurs
rebuild and getting women back in the workforce. This requires
a deliberate investment and initiatives that drive and support
female entrepreneurship.
Today's hearing will allow us to examine what is working
and what changes Congress can pursue to ensure that we are
meeting the needs of women small business owners. It is not
enough to re-create the pre-pandemic economy for female workers
and business owners. We have to build back better. By
unleashing the full potential of female entrepreneurship, we
can create a more equitable, balanced, and prosperous economy.
I would now like to yield to Ranking Member Mr. Meuser for
his opening statement.
Mr. MEUSER. Thank you very much, Madam Chair. It is a
pleasure to be here and thanks to our witnesses. Looking
forward your testimony.
There is no doubt that main street America was hit hard by
the COVID-19 pandemic, particularly women entrepreneurs. And I
look forward to exploring solutions with you all today to
empower women entrepreneurs in their recovery and beyond.
In 2019, prior to the COVID-19 pandemic, U.S. women-owned
businesses represented 42 percent of all businesses, employing
9.4 million workers and generating $1.9 trillion in revenue. In
fact, according to the American Express Annual State of Women-
Owned Business Report, women-owned businesses were growing two
times faster on average prior than all businesses nationwide.
There is a saying that goes, ``Rising tides raises all ships.''
And under the past administration's pro-growth policies, tax
cuts, regulatory relief, and other pro-growth initiatives,
business optimism soared.
The impact COVID-19 had on entrepreneurs is impossible to
ignore as the number of active businessowners in the United
States decreased by 3.3 million or 22 percent from February to
April 2020. The National Bureau of Economic Research found that
during the crucial 2 month window, between February and April
of last year, the number of female business owners dropped by
5.4 million to 4 million, a decline of roughly 25 percent. Very
significant.
In speaking with female entrepreneurs from Pennsylvania's
9th District, I found that they not only face the same
challenges that all business owners are struggling with right
now--lack of labor, fear of increased taxes, high cost of
goods, projects delayed due to burdensome regulations, supply
chain shortfalls and everchanging government mandates, but they
also face unique obstacles in starting and growing their
businesses.
One entrepreneur in my district, Barbara Green, Barb Green,
president of Blue Mountain Ski Resort in Carbon County,
Pennsylvania, has been in business since the 1980s. she started
her career as a second women at a 100-person accounting firm
and credits her success with a couple of things. As she said, I
worked harder, I got in earlier, and I stayed later. Today, she
is somewhat frustrated with our education system for her
business and throughout the area that it does not produce
enough skilled employees and promote the idea that a college
education is the only way to be successful. She said we need to
focus on educating young women in skills development and
entrepreneurship instead of only, quite often only focusing on
how to get into college.
Another woman entrepreneur in my district told me tax
increase and supply chain issues uniquely impact small
businesses much more so than large businesses in their bottom
line stating we are not price setters; we are, in fact, price
takers.
Adequate access to capital and financing opportunities are
also a challenge women entrepreneurs face. In 2019, the
proportion of venture capital dollars that went to female
women-owned founders of companies reached an all-time high of a
mere 2.8 percent. during the COVID-19 pandemic in 2020, the
number fell to 2.3 percent. In a previous Committee hearing on
May 19, 2021, the Association of Women Business Centers
testified that their experience in working with many women
entrepreneurs during the COVID-19 pandemic showed that women
minority-owned businesses do not hold longstanding
relationships with traditional lending institutions. The matter
of access to capital is a particular concern to me and I hope
to learn from our witnesses today on how we can improve and
address this problem.
Additionally, Mastercard's Index of Women Entrepreneurs
found that COVID-19 disproportionately disrupted women's lives
to a greater extent than men due to preexisting factors--the
jobs and sectors women tend to work in, childcare and domestic
responsibilities. Add that to the preexisting gender disparity
in business. That is from Mastercard, their research. Numerous
nonprofit organizations and private companies exist to advocate
for women entrepreneurs, provide increased networking and
mentorship, promote awareness of financing opportunities, and
offer general support to women as they start and grow their
businesses.
Additionally, the SBA's resource partners, such as women's
business centers and SCORE offer similar assistance and
mentorship to women entrepreneurs. There is no doubt that women
entrepreneurs are a vital part of our economy and when they
accelerate, so does our nation. I look forward to learning more
about these challenges women entrepreneurs currently face and
areas where policy can be improved to increase access to
capital and benefit women's businesses.
I would like to thank each of our witnesses again for
joining us today and I yield back, Madam Chair.
Chairwoman DAVIDS. Thank you. The gentleman yields back.
I would like to take a moment to just kind of explain how
the hearing is going to proceed. Each witness is going to have
5 minutes to provide a statement, and then each Committee
Member will have 5 minutes for questions. Please ensure that
your microphone is on when you begin speaking and that for the
folks on the digital platform, make sure you are muted when you
are not speaking.
With that, I would now like to introduce each of our
witnesses. The Ranking Member will introduce his witness and
then we will get into the witness testimony.
Our first witness is Ms. Sherry Turner, the executive
director of the Kansas City Women's Business Center located in
the 3rd District in Kansas that I get to represent. WBCs help
to counsel and mentor women in all stages of business
development and growth. Through the Women's Employment Network,
the Women's Capital Connection and Micro Lending Programs, Ms.
Turner works tirelessly to help educate, build networks, and
support women entrepreneurs. On behalf of the people of the 3rd
District and the State of Kansas, I would like to thank you for
your work and for being here today to testify before the
Committee.
Our second witness today is Ms. Tammy Williams, the founder
and CEO of Envision2bwell. Ms. Williams is a business thought
leader and problem solver who started her company with the
belief that everyone deserves an equal shot at a healthy,
joyful life. She is also engaged in supporting women's
entrepreneurship through the Ellevate Network and Vision 2020.
Thank you for being here today, Ms. Williams.
And then our third witness is Ms. Ayris Scales, the CEO of
Walker's Legacy Foundation, a global platform for professional
and entrepreneurial multicultural women. Ms. Scales is a
champion of women entrepreneurs and underinvested communities
in the public, private, and not-for-profit sectors. She has
nearly 20 years of leadership experience at both the local and
national levels, adjusting racial and gender inequities.
Welcome, Ms. Scales.
And then the Ranking Member, Mr. Meuser, will now introduce
our fourth witness.
Mr. MEUSER. Thank you again, Chairwoman.
Our next witness is Natalie Buford-Young. Ms. Buford-Young
is the chief executive officer of Springboard Enterprises in
McLean, Virginia, and is responsible for leading Springboard's
mission to accelerate the growth of women-led entrepreneurial
companies through access to essential resources and a global
community of experts. With 20 years of experience connecting
women entrepreneurs with human, social, and financial capital,
Springboard Enterprises is the leading network of influencers,
investors, and innovators dedicated to building high growth
companies led by women. Notably, Springboard alumni include the
investors of Zipcar, iRobot, Minute Clinic, Canva, and
Everlywell, whose at-home COVID-19 test received the first FDA
emergency use authorization of its kind. Ms. Buford-Young is an
accomplished and innovative entrepreneur, community builder,
and corporate executive. Prior to Springboard, she served as
managing director of Market Development for Deloitte's Venture
Capital, Private Equity, and Emergency Private Company
Practice. Welcome, and I yield back. Thank you.
Chairwoman DAVIDS. Thank you. The gentleman yields back.
And thank you again to all of our witnesses for being here
today.
Ms. Turner, you are now recognized for 5 minutes.
STATEMENTS OF SHERRY TURNER, EXECUTIVE DIRECTOR, KANSAS CITY
WOMEN'S BUSINESS CENTER; TAMMY WILLIAMS, FOUNDER AND CHIEF
EXECUTIVE OFFICER, ENVISION2BWELL, INC.; AYRIS T. SCALES, CHIEF
EXECUTIVE OFFICER, WALKER'S LEGACY FOUNDATION; NATALIE BUFORD-
YOUNG, CHIEF EXECUTIVE OFFICER, SPRINGBOARD ENTERPRISES
STATEMENT OF SHERRY TURNER
Ms. TURNER. Thank you, Chairwoman Davids, Ranking Member
Meuser, and distinguished Members of the Subcommittee for this
opportunity to provide testimony on women's entrepreneurship.
My name is Sherry Turner. I am executive director of the Kansas
City Women's Business Center. It is my honor to highlight the
incredible resilience of entrepreneurs that contribute to our
U.S. economy in a very profound way.
Our national network of 135 Women's Business Centers (WBCs)
demonstrates a commitment to urban and rural markets serving
economically and socially disadvantaged clients in as many as
38 languages.
Our WBC network is also fortunate to have the association
of Women's Business Centers to support and advocate for women's
entrepreneurship.
On May 19th, Corinne Hodges, CEO of the association,
provided testimony to the Small Business Subcommittee on
Innovation, Entrepreneurship, and Workforce Development.
She testified regarding the increased demand for services
at the WBCs across the nation. During the past year, our WBC
had to become very entrepreneurial as an organization and we
were thrust into virtual services delivery overnight with 133
percent increase in client activity.
The funding through the CARES Act grant enabled us to
increase our capacity to assist this influx in clients. The
primary service has been to assist our clients in navigating
the federal and local emergency relief funding programs and
completing applications. Many of our clients are self-employed
within underserved markets and do not have a solid
understanding of their business financial statements that
sometimes hinder their ability to even apply for the funding
that is available to them.
This pandemic also brings to light the longstanding issues
surrounding childcare. In Q1 of this year, 61 percent of women
business owners with children at home reported that school
closures had impacted their business and 30 percent of such
owners reported scaling back due to childcare needs. Many
childcare businesses have failed this past year and our role as
a WBC can help this sector to rebound.
Lessons that we have learned during COVID. Our CARES Act
are being deployed exactly as the statute intended. Pivoting to
a digital delivery was paramount to our success and we must
remain doing so as a method of delivery. Our digital marketing
expertise is critical for clients to find us. The technology
and staff must remain up to date to remain effective.
We are also supportive of a coalition of economic
development organization focused on bolstering entrepreneurship
across the country. Launched by the Kansas City based Ewing
Marion Kauffman Foundation, Start Us Up is a collective effort
in creating a business plan that provides very specific
recommendations at the federal, state, and local levels to
reduce barriers for entrepreneurs to succeed. The Kauffman
Foundation also released a report on what new entrepreneurs
look like. In 2020 alone, 4 in 10 new entrepreneurs were women,
1 in 5 were Latino, and more than 1 in 4 were foreign born.
A recent survey exploring women starting businesses during
COVID-19 revealed that minority women have been leading new
business starts, largely out of need. Nearly half are minority
owned, and these women were more than twice as likely to start
a new business because of financial need.
Since 1996, new entrepreneurs within Asian, Black, and
Latino communities have steadily increased and foreign born new
entrepreneurs have more than doubled. Strategies to bolster
entrepreneurship in a post-COVID economy must take into account
that new entrepreneurs are diverse and likely to span any age,
gender, and breadth of experience.
We ask this Committee and the current Congress to support
these strategies among the women's entrepreneurial community.
Fully fund the WBC program with $30 million in core funding.
Provide an additional $48 million COVID-related appropriation.
And waive the match requirement until fiscal year 2023. Support
modernization and accreditation of the WBC program to level the
playing field. Reauthorization of the program through
legislation like H.R. 4405 introduced by Representative Davids
to the 116th Congress would support the efforts of 135 WBCs.
Ensure WBCs are partners of choice for engaging women business
owners in any future jobs and infrastructure packages. Support
work-family friendly policies with emphasis on access to
affordable childcare. And prioritize funding for community
development financial institutions that are providing loans for
small businesses in traditionally underserved communities.
We have a significant opportunity in front of us in
elevating the role entrepreneurship has on our future economy
and the role women play in our success as a nation. Women
Business Centers are grateful for your support. Thank you for
your time today. It has been a privilege to address the
Committee. I look forward to your questions.
Chairwoman DAVIDS. Thank you, Ms. Turner.
The Chair will now recognize Ms. Williams for 5 minutes.
STATEMENT OF TAMMY WILLIAMS
Ms. WILLIAMS. Chair Davids, Ranking Member Meuser, and
Members of the Subcommittee, thank you for the opportunity to
testify today. My name is Tammy Williams, and?I am the
president and founder of Envision2bWell Inc., a firm that
reimagines wellness with our unified digital health and
wellness platform. I founded the company in 2019 and we are
based in West Chester, Pennsylvania.
I am before you today as a woman entrepreneur who happens
to be a Black woman in technology and a baby boomer, with a
solution to a problem that has plagued many: an easier way to
be healthy and happier. I started my company for two main
reasons. First, I was let go from a job I loved, and second,
because I knew there was a gap that needed to be filled for
people to be sustainably healthier.
Our platform, EnvisionWell brings knowledge to life in one
centralized location to empower and enable healthier outcomes.
Everything that we do begins with our proprietary Knowledge
Support Access and Autonomy, known as KSAA engagement model
that keeps social determinants of health in mind with a focus
on our 10 Pillars of Well-Being.
We were a little ahead of our time. Focusing on social
determinants of health is now widely accepted as a key to
understanding health, especially in low-income and minority
populations.
If the pandemic has taught us anything, it is that the
scope of workplace wellness initiatives has not taken social
determinants of health, nor employees' individual social or
mental needs into account.
Capital is the lifeline of business. The ability to secure
capital determines an entrepreneur's opportunity to start or
grow. Envision2bWell was mostly self-funded before we got our
first institutional investor than Franklin Technology Partners
of Southeastern Pennsylvania. They provided investment in my
company through their program that meets matching capital for
investment in early stage ventures. The program has helped
thousands of companies accelerate their growth in Pennsylvania.
There are nearly 10 million women-owned businesses in the
United States, generating $1.6 trillion in receipts and
employing nearly 9 million Americans. However, the statistics
remain shocking. Women receive on 4 percent of all commercial
loan dollars and fewer than 1 in 3 loan applications for women-
owned firms were approved.
Women also ask for less funding. On average, it is about
$35,000 less than men.
Recent legislative efforts to improve women-owned
businesses' access to capital are promising and I urge the
Committee to move the following legislation forward.
1. The Women and Minority Investment Act introduced in the
116th Congress made a necessary change that will allow a women-
owned or minority-owned firm to obtain equity or venture
capital funding without losing its status to participate in the
SBA federal contracting programs. The equity or venture funding
would have to come from a firm whose majority owners were women
or minorities.
2. Congress should consider expanding the SBA's Small
Business Investment Company, the SBIC program. There are best
practices in the private sector that the SBA should consider
adopting. For example, I recently participated in a pitch
competition where five companies presented to a panel of three
experienced investors. This was great experience for me to be
able to speak to investors in a forum that exposes investors to
new, innovative businesses. SBA should sponsor pitch sessions
for small businesses that belong in their network to provide
targeted investment introductions to SBIC. Additionally, I want
to applaud the Committee's work on improving this program. I
recommend that any legislative promotions include an emerging
fund manager's program, as well as incentives for making equity
investments in women, minority, and underserved businesses.
3. Revitalize the Interagency Committee on Women's Business
Enterprise to facilitate intergovernmental cooperation with
respect to resources for women in business.
And finally, in light of the pandemic, there is also a
renewed focus on ensuring small businesses have ample
opportunities to win federal contracts. Increasing and
harmonizing requirements for awarding sole source contracts
would provide companies like Envision2bWell the ability to
market and secure federal contracts. In 2020, when the pandemic
hit, I did not know if my business would be able to stay
afloat. The few people at that time I was forced to lay off.
The Paycheck Protection Program became a lifeline but
navigating the process proved to be challenging. Let me just
say, it was not the large bank where I had my account that came
to my aid. It was a small bank who assisted us. Without PPP
loans, my business would have failed and I know that this
Committee and its Senate counterpart are responsible for
putting this program together. Please accept my gratitude for
all the work that went into standing up the PPP program.
As the title of this hearing suggests, we need to reverse
the decline in women's entrepreneurship. And in closing, I urge
the Subcommittee to proactively take steps to break down
barriers with respect to access and support for women
entrepreneurs. Together, we can eliminate obstacles that
prevent women from accessing critical capital to succeed in
business.
Thank you for giving me this opportunity to testify before
you today and I look forward to answering any questions.
Chairwoman DAVIDS. Thank you, Ms. Williams.
Ms. Scales, you are now recognized for 5 minutes.
STATEMENT OF AYRIS T. SCALES
Ms. SCALES. Thank you so much.
Greetings Madam Chair and Members of the Subcommittee on
Economic Growth, Tax, and Capital Access. My name is Ayris
Scales and I have the great pleasure of serving as the CEO of
Walker's Legacy Foundation and the Managing Director of
Walker's Legacy LLC. We are serving women entrepreneurs in more
than 20 markets across the country.
I want you to journey with me for a second. It is 4:00 a.m.
and a woman climbs out of bed. She has one eye open. Two feet
moving towards the responsibilities of the day. She wakes her
children. She makes breakfast. She starts laundry. She sets out
clothes, keeping in mind that there is one child who has soccer
practice and another who has a field trip at the same time. She
then allows her brain to shift gears to business. Where is the
shipment? Is the inventory ready? Will I have enough money to
make payroll? Will I be able to pay my vendors?
Walker's Legacy understands this woman, and like you, is
here to support this woman. Our fundamental values,
inspiration, and strategic approach is shaped and driven by the
philanthropic spirit and unprecedented entrepreneurial
achievements of Madam C.J. Walker, this country's first self-
made female entrepreneur.
Our whole purpose is to unleash the next generation of
self-made women and to improve the livelihood and economic
prosperity of women and girls. We believe that we achieve this
through entrepreneurship, financial literacy and professional
development. We amplify that women are the backbones of our
families and our homes and that women-led enterprises and small
businesses collectively are the backbone of our communities and
that in turn makes them the backbone and true engine of our
economy.
With nearly 50 percent of all Americans working for a small
business, we know that now is not the time to cease investing
in their speedy recovery. According to the American Progress,
African American and Hispanic female-owned businesses are the
fastest growing entrepreneurial segment in this country. They
are growing at a rate of six times faster than White firms at
nearly 300 percent. And with more women being pushed out or
deciding to opt out of the workforce, entrepreneurial endeavors
are becoming their alternative. Over 2 million women left the
labor force during COVID and the unemployment rate for Black
and Latino women remains persistently high. We also know
through our recent COVID-19 Impact Study that 80 percent of the
female respondents shared that they are fearful their doors
will be closed by the end of the year.
These are astonishing numbers but they are not beyond
repair. Supporting wealth creation for low to moderate income
Black and Latin women, female founders, and entrepreneurs is
fundamental to reversing the decline and building back stronger
via a system that is not just focused on rebounding but focused
on true and equitable recovery. Building a more equitable and
inclusive country requires all hands. It is a multi-sector
approach. It is a bipartisan approach. This moment and the
momentum that is finally being focused on investing resources,
infrastructure, and new policies to support and advance small
businesses cannot come at a more poignant time. This country is
and always has been built on the bold vision, innovation, and
hustle of everyday citizens who sought new and better and
different ways to create wealth but also to create opportunity.
Empowering women through entrepreneurship and entities who
support that ecosystem is a surefire strategy to closing
social, economic, racial, and gender inequalities.
However, minority women-owned firms continue to struggle
with growth regardless of their income status, their capital,
and hiring needed to scale and expand. The barriers for women
to maintaining and start successful businesses include as
highlighted earlier a lack of startup capital, access to formal
business training, gender discrimination, little to limited
access to strong and diverse networks and mentors, and
difficulty in obtaining government and private contracts. We
are now seeing new challenges and barriers that are taxing
small businesses as they try to navigate this landscape of
uncertainty. They are sharing with us that they have concerns
around employee reintegration and retention, pivoting and
maintaining technology into the service delivery,
discriminatory evaluation criteria to access capital and
business insurance, and most recently, emerging mental health
issues and concerns.
These are further reiterating the need for ongoing federal
funding but also that of a multisector approach with private
sector partners. Federal support via PPP loans, loan
forgiveness, childcare assistance, and unemployment insurance
were critical lifelines to women-led businesses and the small
business ecosystem in general.
In closing, for more than a decade, Walker's Legacy has
been pivoting and providing critical support for these women.
We have an industry agnostic business accelerator and we are
absolutely committed and poised to be a partner as we look at
long-term sustainability solutions to ensure, in fact, that
women and small businesses are at the forefront of our recovery
efforts today and tomorrow.
This concludes my statement. Thank you again for the
opportunity to share about Walker's Legacy and future legacy
makers.
Chairwoman DAVIDS. Thank you, Ms. Scales.
And Ms. Buford-Young, you are now recognized for 5 minutes.
STATEMENT OF NATALIE BUFORD-YOUNG
Ms. BUFORD-YOUNG. Good morning. I am Natalie Buford-Young.
I am the CEO of Springboard. Thank you, Chairwoman Davids,
Ranking Member Meuser, and the Committee for having me today.
Springboard Enterprises is a 21-year-old not-for-profit
committed to propelling women entrepreneurs forward. We serve
as a growth accelerator for women entrepreneurs who are
building innovative companies at scale. The value that
Springboard Enterprises brings to the market has been validated
by our strong 21-year track record of success with more than
835 companies coming through our program resulting in more than
$27 billion of value created. Approximately 90 percent of our
portfolio companies receive funding and we have had more than
200 exits or M&A events and 22 IPOs. And despite all of
Springboard's success, women founders are still only receiving
a small fraction of venture capital funding.
In 2019, women founders received a paltry 2.8 percent of
venture capital funding, and in 2020, it dipped even lower to
2.3 percent of venture capital funding going to women founders.
And studies are really pointing to two contributing factors for
the decline. Women were disproportionately impacted by COVID,
as they often serve as the primary caregivers for their
families and found themselves faced with the choice of focusing
on the care of their families or building their companies. And
some opted to put their company growth on hold or postpone
their capital raise.
The second is investors, faced with market uncertainty,
reverted back to their more ``comfortable'' networks and were
less willing to take a ``risk'' on unknown entities, including
women founders. Ironically, studies show that companies with a
woman founder performed 63 percent better than investments in
all-male founding teams, and businesses founded by women
deliver twice as much per dollar invested than those founded by
men.
In contrary to the overall market, in the time that most
women-founded companies were taking a hit from 2019 to 2020,
Springboard was doubling down and our Springboard companies saw
an increase. In 2019, Springboard companies raised $1.06
billion in funding, and in 2020, despite the pandemic, our
Springboard companies raised $1.31 billion in funding.
Springboard is the first organization of its type focused
on women entrepreneurs and has been instrumental in the success
of our entrepreneurs, including those who built top companies
such as Zipcar, iRobot, Minute Clinic, Constant Contact,
Everlywell and many others. While there are many accelerators
and start-up organizations that focus on companies at the
ideation stage, Springboard programs serve women entrepreneurs
that are at the critical stage of scaling their companies. Our
companies have typically raised their seed or angel funding and
are approaching series A or have raised their series A.
Springboard impacts the success of our women entrepreneurs
through our expert network and our signature programs. Unlike
most accelerators, we are focused on assessing the stage and
skill sets of our entrepreneurs and then helping them fill
those gaps using our network of 5,000 advisors.
And here is how it works. Women entrepreneurs apply, are
evaluated, and then selected to join one of our various
cohorts. Once a woman is selected to be a part of one of the
Springboard cohorts, we assess the needs of the founder and the
company. Then, we match them with a custom set of advisors from
our network of more than 5,000 subject matter experts.
Another one of our signature programs is Dolphin Tank. And
like the show Shark Tank, select companies present their quick
pitch to a live audience. In the case of Dolphin Tank, our live
audience is comprised of advisors and investors who offer their
feedback and connections.
Our collective community, which includes all of you, needs
to ban together to support the next generation of women
entrepreneurs building their companies at scale. Here are a few
of the ways that you can support the women entrepreneurs:
You can provide incentives for all types of investors to be
motivated to invest in women-founded companies.
And you can create direct grant programs that support mid
to later stage women-led start-ups where there is a large
funding gap.
Springboard and other similar not-for-profits and
accelerators have accomplished so much with the support of the
private sector primarily through corporate sponsorships,
corporate philanthropic donations, as well as individual donor
contributions. Despite their contributions, we still need
additional support to allow us to serve more women
entrepreneurs. As corporations have cut back on sponsorship and
philanthropic budgets during the pandemic, it has impacted our
fundraising efforts to support our mission of advancing women
entrepreneurs. While direct support of women entrepreneurs is
key, support of organizations like Springboard is crucial to
provide women entrepreneurs with the educational and hands-on
support they need to build their companies to scale.
Here is how you can support Springboard and our mission:
Provide meaningful governmental incentives for corporations
and other donors to give to non-profits that support women
entrepreneurs. And second, establish governmental grant
programs that directly support women entrepreneurs while
establishing key metrics on their outcomes. We would love for
you to see us in action and join us for one of our Dolphin
Tanks, which you can attend virtually.
Thank you to the Committee for this opportunity, and I look
forward to your questions.
Chairwoman DAVIDS. Thank you. And thank you again to all of
our witnesses for being here today and for the work you are
doing in supporting women entrepreneurs.
So I will begin by recognizing myself for 5 minutes. Thank
you to our witnesses for joining us again today.
First, I would like to start with Ms. Turner, the executive
director of the Kansas City Women's Business Center. The center
is located in Fairway, Kansas, which is in the 3rd District and
has been a central lifeline for so many women, small business
owners during this pandemic. I know in 2019, the Kansas City
Women's Business Center served over 800 businesses across the
Greater Kansas City area and the entire state of Kansas which
is an enormous geographic region and a lot for a staff of four.
Ms. Turner, I am curious if you could share with us how the
WBC, the Kansas City WBC was able to adapt during the pandemic
to serve so many businesses in the middle of a crisis.
Ms. TURNER. Thank you for the question.
Certainly, the CARES Act was our lifeline as an
organization to be able to increase our capacity. The way in
which we did that was obviously a digital virtual deliverable
immediately. We did that through being able to contract with
local women-owned businesses that were subject matter experts
on a variety of topics that were essentially really for
companies during COVID. You know, how to navigate communication
with employees. How to navigate cashflow, supply chain
management, social medial. Whatever it took we had about 74
different business topics that we converted to our YouTube
channel which allowed a broader audience not only across the
state of Kansas but obviously available to anyone. We had about
35 different states that had plugged into some of our content.
The other thing that we found interesting is in the fall we
had an uptick of calls related to startups. And this is true of
a down economy. So we were able to convert our in-person 8-week
startup course to a virtual course and will continue to do that
probably long term. We also made sure that our Women's Capital
Connection, which is our angel investor network, which meets
monthly with 45 women angel investors investing in women-led
companies was able to see companies virtually and continue to
work with companies that were interested in that kind of equity
funding.
We also, with some of the CARES Act dollars through one of
our largest counties in Kansas was able to put $13.5 million of
grant money towards businesses that were less than 50
employees. And so all of these things were really the lifeblood
for us as an organization but certainly could not have done it
without the CARES Act grant we received.
Chairwoman DAVIDS. That is really helpful.
I want to touch on a couple of things and hopefully I will
have time here. First, you know, last Congress, and you
mentioned this, Ms. Turner, in the testimony that you gave, I
introduced the Women's Business Center Improvement Act which
would reauthorize the WBC program, increase the funding level,
and increase the cap on individual center grants. This
Committee and the Full House passed that bill in 2019 with
broad bipartisan support. And I know our WBCs are undoubtedly a
critical resource partner for our female entrepreneurs. And one
of the greatest challenges that our female entrepreneurs face
is access to capital.
I am curious, Ms. Turner, are there specific reforms that
were included in that bill that you see as better serving the
women entrepreneurs and small business owners that we have been
talking about today?
Ms. TURNER. Yes. Particularly, the increase in funding.
Currently, the grant we receive through the Office of Women's
Business Ownership is about 25 percent of our budget. And
again, we are a small WBC. This would potentially double that
which would really allow for more service. I think
modernization is the key to some of that legislation which is,
you know, we have had to step up our game. Stepping up our game
does not mean that our clients do not have challenges over the
next couple of years if they are able to remain in business.
The free counseling and training that we provide requires a
capacity building. The largest piece of that would be the
marketing and digital medial consultant we were able to hire
during the COVID situation and that will be paramount to what
we look like in the future to ensure that our clients are able
to find us as a resource.
Chairwoman DAVIDS. Thank you. And my time has now expired.
And the Chair will recognize the Ranking Member, Mr. Meuser
for 5 minutes.
Mr. MEUSER. Thank you, Chairwoman Davids. And again, thanks
to the witnesses for being here.
So Ms. Buford-Young, I shall start my questioning with you.
In your experiences and interaction with women
entrepreneurs, what is the top legislative priority you could
define for us that would benefit and help women entrepreneurs
and women-owned small businesses?
Ms. BUFORD-YOUNG. I will not pretend to understand all of
the mechanics of the government but I do know the needs of what
women entrepreneurs are seeking and I know that there are a
number of programs that are really out there to help very
nascent stage, early stage companies as they are forming. And
what we are finding is once women get over that hurdle there is
a huge gap in the ability to get funding for companies that are
ready to scale which is why we focus here and, you know, we
have really relied on the private sector to fill that gap. So I
do not know the mechanics behind it but I do know that that is
the need, is to continue the support for women entrepreneurs
considering that venture capital should be the source but we
are only receiving currently 2.3 percent of funding.
Mr. MEUSER. Okay. You spoke about the idea of incentives
for access to capital and there is this seeming focus on
venture capital that I am somewhat curious about. Banks right
now have high reserves and lines of credit are clearly
available in those traditional means of gaining access to
capital for businesses. So maybe we can explore that
afterwards.
But what is the type of incentive? So from a real world
perspective, forget about the idea of crafting legislation,
from a real world perspective, what would you define or offer
as a type of incentive that would help create more investment
in women-owned small businesses or small businesses in general?
Ms. BUFORD-YOUNG. I think when we are looking at the large
venture capital firms or looking at investors of any size, to
my knowledge there is not a specific incentive or motivational
factor from a tax perspective or any other perspective for them
to increase their investment in women entrepreneurs. So aside
from knowing the mechanics of how to do it there has to be
something that forces or encourages investors and the private
sector to increase their investment for the entrepreneurs.
Mr. MEUSER. Thank you.
Taxes are a point of discussion. They always seem to be but
they are moving forward. There was close to a 20 percent
reduction for small business in the last Jobs and Tax Act.
There is talk now of raising capital gains taxes. How would,
and briefly perhaps, how would raising capital gains taxes
affect you, affect the type of incentive to extend venture
capital loans or make investments?
Ms. BUFORD-YOUNG. I do not know the answer to that. I am
not a tax specialist. So I wish I had more.
Mr. MEUSER. Okay. Fair enough.
So Ms. Williams, I would like to turn to you, West Chester,
fellow Pennsylvanians. West Chester is not too far outside my
district so I am glad you made the trip down.
Ms. WILLIAMS. Thank you.
MEUSER. You talked about a bill, a Women Minority Act for
venture capital funds would not cause you to lose SBA. I
understand Marco Rubio, Senator Rubio sponsored such a bill
last Congress. So I can assure you that would be something that
I will take a look at.
What else could you tell us about your business, some of
your experiences, and what, sitting in my seat, sitting here,
what could we do on a federal level, but perhaps even offer on
a state level? What could Pennsylvania do for you? What can
this Committee help you with?
Ms. WILLIAMS. Thank you, Mr. Meuser.
I believe that one of the things, first and foremost, is
access. At Envision2bWell, we call this KSAA, Knowledge,
Support, Access, and Autonomy for living a sustainably
healthier life. But the same applies to any entrepreneur. It is
the Knowledge, Support, Access, and Autonomy to start and grow
your business. You cannot scale your business without money.
Typically, you cannot get money without introductions. So it is
built upon relationships. So those two really intersect.
Without it, you are pretty much stuck where you are.
More mentoring. You know, I know that SCORE and the WBDCs,
you know, those organizations have mentoring programs but I
believe that a program that would be a step above, say 101,
would be great for those small businesses that they are
thriving, they are ready to scale, and they need to go beyond
what it takes to just start the business. So have those
introductions, being able to pitch, doing all of those things
makes a difference. And I can tell you that from my experience,
in starting a business that had to be self-funded to the tune
of hundreds of thousands of dollars before we got our first
institutional investor, it is a tough thing and not many
businesses, whether they are minority or women can do that. And
so just more access. Thank you.
Mr. MEUSER. Madam Chair, we are over my time. I can see why
you are successful and are such an asset to those that you work
with. So I yield back. Thank you.
Chairwoman DAVIDS. Thank you. The gentleman yields back.
And next the Chair will recognize Rep. Newman for 5
minutes.
Ms. NEWMAN. Good morning, everyone. And thank you, Chair
and Ranking Member. I appreciate it.
And congratulations to all the marvelous entrepreneurs on
our dais today. I appreciate all the things you have done to
get us through the pandemic. Small business got us through. So
bravo.
So a couple things. Just to give you some good news,
obviously, if you read any of the data or the tax propositions
and proposals from the Biden administration, small business
will not be affected. Large businesses will pay their fair
share to assure you of that. And just to answer some questions
that were raised a little bit earlier. There are several
studies about capital gains and they are not tethered to the
success or lack of success to small businesses. So more good
news.
So I have a question. So recently, we found out that the
RRF Fund, the Restaurant Revitalization Fund is in great
jeopardy because it is being sued by a conservative Republican
group. And as we all know, those 3,000 folks that applied and
were approved for this, it is primarily veterans, women, and
economically disadvantaged. So that is scary stuff. As a result
of that, and all the reasons you cited today, I am just going
to ask a couple of you to share what you think are the top
priorities for Congress to do given that jeopardy and then just
the state of affairs in our economy anyway, even though we are
coming out of things.
So I am going to start with Ms. Williams if you would not
mind. Your top priorities.
Ms. WILLIAMS. Thank you.
Again, I think that my top priority really comes down to,
and I cannot say this enough, it is access. Access,
relationships. That is going to lead to capital.
Women have unique experiences. They have unique ideas, like
mine, that I was able to bring to life. But you still need
access to capital. So taking away anything that is going to at
least open those doors is a problem. It needs to be accessible.
The whole ecosystem. It is not just one thing. It is capital,
suppliers, vendors, distributors. Even our politicians and
representatives, all of you. You have a major impact on this.
And so again, the PPP was a lifeline for us. And without it I
would not be here talking to you or maybe in a different
setting. So I would say that that would be, for me, the biggest
priorities.
Ms. NEWMAN. Thank you for your counsel.
I am going to go to Ms. Scales. If you might share your top
priority given all of the factors that I shared in my comments.
Ms. SCALES. Absolutely. I agree with all of the other
witnesses. But one of the things when I think about access to
capital, and I know that comes up a lot, you know, I kind of
pushed the needle a little bit where I say there is capital
that exists that is available. Where we could use additional
support is how we look at those barriers to accessing that
capital. Right? And those barriers come from things such as the
evaluation criteria that financial institutions have that they
apply for nonminority or women-led organizations or entities on
to women-led or minority-led businesses. So one, just kind of
looking at what those barriers are. How to get financial
institutions and venture capitalists to feel more comfortable
with taking risk when really they should not see us as at risk
because we are performing and outperforming and sustaining in
ways that others are not with very limited resources.
The other thing that I would really recommend or challenge
is how we continue to absolutely invest in small businesses but
supporting those of us who are part of that ecosystem who is
investing and supporting them. We, too, need to have access to
capital and access to resources and support so that we can
continue with technical assistance that is responsive, that is
adaptive.
And the last that I would say is what role do we play in
ensuring that the integration of technology is really at the
forefront of how we are conducting and doing business.
Traditionally, women of color, entrepreneurs, small businesses
have had challenges with accessing technology, integrating
technology, and what we know now due to some of these
behavioral changes, consumer changes with COVID is that
business will no longer look the same as it has and that we
have had to pivot more quickly with that integration of
technology. So what funding resources and programs can further
do that. And then I am always going to support mentoring and
expanding networks and that is part of what we do at Walker's
Legacy.
Ms. NEWMAN. Well, thank you for your comments. And I agree.
I was in that position where I had to pitch my business to VC&P
companies and there are two comments that I always make. One is
that they always saw me as a risk, too. And then secondly, I
never saw a person of color or women on any dais out of 50 of
them. Maybe one. And so we have to make sure we are
incentivizing people that have lived experiences that sit in
these companies and make these financial decisions. So that is
one of my passion areas.
Thank you very much, and thank you all for your great
comments today.
Chairwoman DAVIDS. Thank you, Ms. Newman.
And the Chair will now recognize Rep. Van Duyne for 5
minutes.
Ms. VAN DUYNE. Thank you very much, Chairwoman Davids and
Ranking Member Meuser for holding this hearing today.
Before the COVID-19 pandemic, women entrepreneurs as
Congressman Meuser had mentioned, were making great strides. In
fact, from 2014 to 2019, women-owned businesses increased
revenues, they hired more employees, and they grew at a faster
rate than businesses at large. As a former small business owner
and entrepreneur myself, I can tell you that women
entrepreneurs face the same hurdles that every entrepreneur
faces. And at the end of the day, one key measures success in
business is the same: does your company bring in more money
than it loses? Something the federal government still fails to
understand.
We cannot sit here and talk about challenges that women
entrepreneurs face honestly without mentioning this
administration's harmful anti-growth policies. No matter your
gender, race, or background, increased taxes, skyrocketing
inflation, labor shortages, and federally mandated minimum wage
hikes will kill any hope that an entrepreneur has of creating a
successful business.
To highlight the effect these policies are having, just
this past week I held a local restaurant owners' roundtable to
discuss the recovery and I cannot make this up. We literally
had a number of folk who could not come to the roundtable
because they could not find people to cover their shifts
because they cannot compete with the federal government paying
people to stay at home.
These problems are not going away any time soon, and after
seeing the harmful effect of long-term shutdowns and enhanced
unemployment benefits, one thing should be crystal clear. One
of the best ways to help female entrepreneurs is by not hurting
them. The uncomfortable truth here is that no matter how much
rhetoric you use touting more equitable entrepreneurship, fancy
words will never make up for disastrous economic policies. If
you want to help small business owners, the equation is simple:
ease tax burdens, lower barriers of entry, and do not make
small businesses compete with never-ending federal unemployment
benefits.
And with that said, I really appreciate all of you coming
today. I appreciate your comments.
And for Ms. Williams, you made a really good point. You
said that one thing that women are looking for right now,
business owners are looking for right now is access to capital,
is to have money. You made a great point about that, needing
money. But with the policies that you see coming down the pike
right now from this administration, including the increased
capital gains cost, increased corporate tax rate, the rising
inflation, rising cost of things like gas, food, utilities,
paper products, you name it, how is those policies, if women-
owned businesses are seriously in need right now of capital,
how is it helping them by having more of that capital that they
make going back to the federal government and going back into
increased costs?
Ms. WILLIAMS. Thank you very much for asking that great
question. I have been one that has always said if I was paying
taxes it meant that I was making money. But, you know, there
comes a point where you do need to hold on to more of that
money. I can give you something from my experience.
So as a small business, and many of us face this, we are
competing with those large businesses for great talent. Those
large businesses have perks. They have healthcare and benefits.
And as a result, we are a tech company and we are about being
well. So I had to make a decision: do we add benefits to our
cost to attract talent? And I can tell you that not one person
that is on my team is paid at market value. Not one. And they
all have access to and are being delivered benefits. A full
benefits package that we are eating some of that cost.
Now, you know, when you talk about taking away money, and
knowing what we are trying to do to scale, it is an incredible
burden that keeps you up at night. So I agree with you
wholeheartedly that we need to do something. There needs to be
policy that is going to help those small businesses. And right
now I am going to talk about women-owned and minority-owned
businesses, be able to not only start a business but to grow
it, to scale it. And then possibly even exit. That is where we
are headed.
Ms. VAN DUYNE. I appreciate that very much. And I will
yield back the remainder of my time. Thank you.
Chairwoman DAVIDS. Thank you. The gentlewoman yields back.
The Chair will now recognize Congresswoman Chu.
Ms. CHU. Yes. Ms. Williams, in April, I introduced my
legislation, H.R. 2680, the Providing Real Opportunities for
Growth to Rising Entrepreneurs for Sustained Success, or
PROGRESS Act. This legislation would support the smallest
businesses, those without any employees, the sole proprietor,
by helping them expand and incentivize third party investment.
And non-employer firms are much more likely to be owned by
women and female entrepreneurs on average start out with
roughly half the capital as male entrepreneurs. So this
legislation would create a refundable payroll tax credit for
non-employer firms that hire their first full-time employee and
an investment credit to encourage third-party capital
investment into non-employer firms.
So can you talk broadly about how policies to level the
playing field by incentivizing third-party investment into
small businesses and the expansion of non-employer firms can
improve outcomes for female entrepreneurs?
Ms. WILLIAMS. Thank you very much. And that is another
great question.
It most definitely can help to improve. You know, most
businesses are started as solopreneurs. And then if you start
to grow, attract contracts, and you cannot do it all alone. You
cannot. There is no way that you can do everything by yourself.
So in order to bring on people, you know that you already have
to have contracts and revenue coming in. Sometimes that is just
not the case. So to have this ability to receive a tax credit,
first of all, I can say I will raise my hand because I know
that I could certainly use it as well. But, you know, this is a
very good thing. And I do hope that this H.R. 2680 is able to
make it through in all aspects that is going to really help
those small businesses, in particular those very small
solopreneurs to scale and grow their businesses, keeping in
mind that everyone does not want to have a high growth company.
There are some people, many, that need a lifestyle type
business that is going to pay the bills and afford them a great
life to live. But they also deserve to have that opportunity
with access to be able to do that.
Ms. CHU. Thank you for that.
Ms. Scales, you talked about child and family obligations
creating barriers for women to start and maintain businesses.
Congress and President Biden can address these barriers by
ensuring that all workers, including entrepreneurs have access
to benefits like paid leave and affordable childcare. So as a
Member of the Ways and Means Committee, I strongly support
Chairman Neal's Building an Economy for Families Act discussion
draft which would provide 12 weeks of universal paid leave for
all workers and ensure progressive wage replacement for low-
income workers, as well as establish a new childcare
information network, create a payroll tax credit for childcare
providers to raise wages, and invest $15 billion into physical
infrastructure for childcare. So I am so glad that President
Biden is prioritizing these critical issues in the American
Families Plan because these policies can help our small
businesses thrive.
Now, when I was in the California legislature, I wrote it
for the nation's first paid family leave because I knew it
would benefit our state small businesses, including women-owned
businesses. Women are much more likely to leave the workforce
because they have to care for loved ones or provide childcare
for their children which was a reality magnified during the
pandemic. And in fact, December, this last December marked a
33-year low in women's labor force participation because of
this.
Can you discuss how benefits like a full 12-weeks universal
paid leave can lower barriers for female entrepreneurship and
support the long-term care of women-owned businesses?
Ms. WILLIAMS. Absolutely. You know, when I gave my opening
statement I kind of tried to set the tone for what a day in the
life is like for a woman who is juggling working, as well as
running a business and a household. And supports and
investments like this go a long way. When you have that burden,
when you have that pressure off of you for where your children
will be, will they have safe and affordable and high-quality
educational opportunities from a childcare perspective? When
you know that your employees are not thinking about that or
having to come up with how do I take today off? You know, how
do I make sure that I show up but still be present? It goes a
long way.
And I think back to even my own personal story as a young
mom and trying to navigate through college and figuring out
what was next. And I was really fortunate to have support with
having high quality childcare for my daughter. And it took
additional burden off of me. And what we are realizing is that
this burden that our employees are having to face and that this
burden that our founders and entrepreneurs are having to face
is beginning to impact not just people economically but
mentally, emotionally, and socially. And so anything that the
federal government can do from a responsible standpoint, from a
responsive standpoint to further support our micro
enterprising, our entrepreneurs, our women, our mothers is a
best bet and sure bet for me.
Ms. CHU. Thank you. I yield back.
Chairwoman DAVIDS. Thank you. The gentlewoman yields back.
And next, the Chair will recognize Rep. Young Kim, the
Ranking Member on the Subcommittee of Innovation,
Entrepreneurship, and Workforce Development.
Ms. YOUNG KIM. Thank you, Chair Davids and Ranking Member
Meuser for holding this very important hearing today. I also
want to thank our witnesses for being with us.
As a former woman small business owner and a mother of
four, I know firsthand the hurdles that women entrepreneurs
must overcome in order to succeed. the COVID-19 pandemic has
exacerbated challenges many women entrepreneurs face on a daily
basis to keep their doors open for business. Lack of access to
capital, never-ending lockdowns in states like California and
the looming uncertainty of higher taxes does not empower and
incentivize our women entrepreneurs to start and grow their
businesses.
So Ms. Williams, question for you. In your testimony you
highlighted H.R. 3842. This is a bill I introduced with my
colleague, Representative Neguse to establish a microcap SBIC
certification. Could you further expand on your testimony and
tell us how the legislation could incentivize greater access to
capital for women entrepreneurs and for businesses serving
underrepresented communities?
Ms. WILLIAMS. Thank you very much for that question.
You know, as a small, minority, women-owned business, being
certified as such has really helped to open doors. The WOSB
program, women-owned small business and also being certified
through the National Minority Supplier Development Council and
the Women's Business Enterprise National Council, all of these
open doors. But opening doors is only one thing.
Since the pandemic and not being able to be face to face
where you can really establish those relationships, you can get
mentoring. People can connect with you, see that body language.
It takes away from what you are really able to do. Anything
that any of the Committee Members can do to assist us with
having more access, not just to capital, okay, because capital
is important but it is not just capital. It is access to
individuals that can help us, mentoring programs. All of these
things make a difference. And I do hope, and I am not that
familiar with the legislation, but I do hope that what I am
saying in my testimony will help in some way to expand upon
that.
Ms. YOUNG KIM. Thank you.
You know, in your testimony you also offered suggestions to
improve the SBA's Small Business Investment Company program. So
have you received financing through the SBIC program?
Ms. WILLIAMS. No, I have not. And the SBIC program I will
say is actually a pretty cumbersome program to get through. I
equate it pretty similarly to the PPP. And if you are not used
to a lot of paperwork or how to navigate it, you know, it can
be pretty daunting. Now, at the same time you have
organizations out there that will assist you for a price. And
so, you know once again you still need the money to do it. I
received PPP. I did receive a small EIDL. But outside of that,
there has been absolutely nothing.
Ms. YOUNG KIM. Well, I hope we can continue to be a
resource to you, and I hope that you can take advantage of
several SBA related programs. And we would love to be there to
help you if we can.
But next, I would like to ask a question to Ms. Scales. In
your testimony, you stated 70 percent of small businesses that
receive mentoring survive 5 more years, and 93 percent of small
businesses have noted that mentoring has helped them succeed.
In your experience, what drives individuals to become a mentor?
And do you have any suggestions on how the SBA's resource
partners, like Women Business Centers and SCORE can improve
their mentorship and outreach?
Ms. SCALES. Oh, thank you so much for that question. We are
passionate about mentoring and connecting mentors to small
businesses, particularly women of color businesses.
When you ask what drives people to serve as a mentor, and I
think that has, you know, one of my favorite responses is it
depends. But I think at some point you do get to a level where
you find that you are in a position to be able to give back and
you really want to make sure that you are doing your part to
support the next generation of whatever. If it is entrepreneurs
or young people who are coming up. But when we think about the
importance of mentoring and why it is so important for women of
color entrepreneurs is that representation matters. That being
able to see and connect with and learn from others who have
been in your shoes, who understand your plight is super
critical. And so for even the approach that we take at Walker's
Legacy, we have an accelerated program called Prospectus and
Women Who Enterprise. And a core part of that is making sure
that we are connecting women in those cohorts to mentor,
particularly mentors of color because so often we know that
they do not get access to these additional network that we know
are critical to supporting their sustainability and their
expansion.
Beyond that, one of the things that we also note with
mentoring is that it creates a space in place for our
entrepreneurs to be able to receive resources beyond the
financial contributions, beyond some of the contractual things
that they are able to access, but having someone that is a real
thought partner and leader in supporting their growth.
Ms. YOUNG KIM. Thank you both. I know my time has expired.
Thank you. I yield back.
Chairwoman DAVIDS. Thank you. The gentlelady yields back.
Next, the Chair will recognize Representative Evans for 5
minutes.
Mr. EVANS. Thank you, Madam Chair.
Ms. Williams, welcome. It is great to have you here as a
Black female entrepreneur whose business is located in West
Chester, Pennsylvania, just outside of my home city of
Philadelphia. I understand that you started your business after
you lost your job in corporate America.
Can you speak a little bit more about your entrepreneur
econ system, how you got started, how can we help create a
situation where all women entrepreneurs have a robust support
and entrepreneur ecosystem?
Ms. WILLIAMS. Thank you very much. And I am really happy to
be here and to see representation as well from Pennsylvania. So
it makes me kind of feel at home.
You know, mentoring. We have talked about mentoring. And it
is often mentioned as a helpful tool as you said. It helps with
the relationships but it is about relationships that actually
matter. You know, networking for the sake of networking really
helps nobody. So knowing that you have an advocate within an
organization or an industry that has your back can provide a
tremendous boost of confidence. And I will give you an example.
I am in a mentor protege program, PACT. Mr. Meuser, you
might be familiar with this. It is the Philadelphia Alliance of
Capital and Technology. And PACT partners startup companies
with teams of mentors who are seasoned entrepreneurs themselves
with decades of experience. Now, while volunteers similar to
SCORE, these seasoned entrepreneurs must have founded or led a
company as an entrepreneur. And it is a joint partnership
between PACT and the Ben Franklin Technology Partners of
southeastern Pennsylvania who provides matching capital. So you
see where that goes. It is a two-way street. They are giving
something but you are able to potentially get something back.
And so for me, after having lost my position, a very lucrative
position by the way in corporate America, I made the decision
that this idea of filling the gap that was needed to help
people with their health and well-being, but that it is for
everyone through the lens of social determinants of health was
so important that it was necessary to do that. We are, by the
way, we happen to be a C corp but we are also a public benefit
corporation because what you do and how you look at everyone
matters and that is what we believe. And that is what I
believe. I get pretty passionate about this, and I could go on
and on and I do not want to take up all the time but would love
to have an offline conversation.
Mr. EVANS. Thank you.
Prior to the pandemic, Ms. Scales, women of color accounted
for 50 percent of all women-owned businesses. However, there is
a stark revenue disparity between minorities and non-minority
women-owned businesses. Women minority owned businesses average
just over 65,000 while nonminority women own on average over
218,000. What do you think contributes to this disparity and
how can Congress help? Ms. Scales?
Ms. SCALES. Contributing to that disparity. Wow, we could
be here for a long time.
I think it comes down to a few things. We have talked about
mentoring. And behind mentoring is being able to have those
access to additional networks and markets. Right? And we have
talked about the impact of having access to capital, or I like
to say the barriers to accessing capital. Absolutely. And
technology integration into service delivery. But just as
importantly is the additional responsibilities that are often
placed upon women of color entrepreneurs where they do not have
some of the flexibility, having the additional resources to be
able to step back in a more strategic way to think of how they
are sustaining, scaling, and growing their business. We are so
often moving quickly, pivoting, juggling so much. So there are
many I think factors that contribute to that but access to
markets and new networks and having the removal of barriers
that are impacting them from accessing capital and just having
the additional supports to remove some of the burdens that also
interfere with their abilities to focus and scale and sustain
their business unequivocally service issues.
Mr. EVANS. Real quick. I think I have a little time.
Ms. Williams, do you have any reaction to that question I
just asked?
Ms. WILLIAMS. First, and I know that we are out of time,
but we can always, always do more. Starting a business is
daunting in its own right. But there is only so many cohorts
around. There are only so many applications that you can fill
out and then hope with a wing and a prayer, like you are
submitting a resume into a blackhole, that somebody is going to
recognize it. And it comes back to the relationships and being
able to have those doors opened so that you do not just fall
into a blackhole. Venture capital is not for everyone. Okay?
Grants. We need more grants. We need more other ways to provide
capital. And the banks, you know, they have a set of criteria
that women do not always fall into very neatly, and especially
women of color. And so these are all things that really need
emphasis. And we need to find creative measures to ensure that
small businesses, those entrepreneurs and especially those
women-owned businesses that might have the bakery shop, that
might have the hair salon. You know, they are just as
important. Well, I am going to stop there because I could go on
and on and I see the time. Thank you.
Mr. EVANS. Thank you. I yield back the rest of my time.
Madam Chair, thank you.
Chairwoman DAVIDS. Thank you. The gentleman yields back.
The Chair will now recognize Rep. Bourdeaux for 5 minutes.
Ms. BOURDEAUX. Thank you, Chairwoman Davids and Ranking
Member Meuser. And thank you to our witnesses for taking the
time to speak with us today.
In the years leading up to the COVID-19 pandemic, women-
owned businesses experienced significant growth, but once the
COVID-19 pandemic hit, this growth came to an abrupt halt.
Prior to the pandemic, 67 percent of male-owned businesses
ranked the overall health of their business as good, compared
to 60 percent of women-owned businesses. However, we know that
the pandemic has disproportionately affected women-owned
businesses, and the numbers bear that out. Male-owned
businesses only saw a drop of about 5 percent in that same
metric in July of 2020 to 62 percent, while that number among
women-owned businesses fell 13 percent, from 60 percent to 47
percent. A similar disparity can be seen in a recent survey by
the U.S. Chamber of Commerce which indicates that in 2021, less
than half of women entrepreneurs believe their revenue will
increase compared to almost 60 percent of male owners who
believe the same. Despite the significant federal relief, too
many women-owned small businesses are really still struggling
to recover from the pandemic.
This is a question for Ms. Turner. The pandemic has also
disproportionately affected minority-owned businesses. It is my
understanding that nationwide in 2020, over 50 percent of the
people served by our Women's Business Centers were people of
color. In my district, the WBC in Norcross, Georgia does
extremely important work, very useful for businesses owned by
women, and especially women of color. But we are very
interested in the Community Navigators program and how we can
use that to be more useful.
And so one question is, you know, what can we do to do a
better job of reaching out to diverse communities, and how
should we target the Community Navigators program to be more
helpful?
Ms. TURNER. Thank you for the question. Related to this in
access to funding and being intentional about serving women of
color, our organization has been very intentional over the last
several years and have been able to increase that percentage to
about 48 percent. So I do believe that there has to be
intention. Part of the natural way of ensuring that access to
capital is available to microenterprises and their startup is
really through a lot of the work that is being done in
microlending. And I want to really emphasize that because the
Minority Development Institutions and the Community Development
Financial Institutions have been doing this work for a long
time. And it does not mean that we are not attached to the
connectivity with institutional banking relationships but
microenterprises are, you know, the technical assistance is
also provided to that business owner to be able to navigate and
ensure that the capital that they receive as a borrower
actually has some growth potential for their business. And I
cannot overemphasize that this has always been a struggle to
ensure that these institutions have had the amount of capital
needed to actually be intentional in those underserved markets.
So Community Navigator is an example of something that may roll
out to actually help that connectivity that I think every
community right now is exploring. And so obviously we welcome
any of that kind of connectivity if that is helpful.
Ms. BOURDEAUX. I am very interested in the microlending
programs and how we really get that into the community. I meet
with small business owners all the time and women, and I do not
know how many times, even though we have all these resources
available for them, they just do not know about it and it is
really surprising to me. We have just got to keep pushing. Keep
pushing on that.
On that note, we have had some really important programs in
the pandemic that have helped small businesses and actually
have reached a much broader community. Are there any programs
or pieces of programs or parts of them that we should consider
continuing as we recover from the pandemic?
Ms. TURNER. You know, anything, I think it has been stated
prior by the other witnesses today, is any kind of small
business tax incentives can be helpful long term. I think the
World Bank assessment of the United States has us listed as
53rd in the easiness, the ease of being able to start a
business. And in the United States that is just not acceptable.
I think the work that is being done, as long as clients can
actually find the resource, to your point, which is why I think
a suggestion of making sure that we have that digital presence,
you know, it is all shifted. Right? And being able for people
to find those resources. What has been done with the PPP and
the EIDL loan and even communities that have created their own
relief funding programs has absolutely elevated access to
capital for those underserved markets. We just have to keep it
going.
Ms. BOURDEAUX. Thank you so much. We are out of time. I
yield back.
Chairwoman DAVIDS. Thank you. The gentlewoman yields back.
All right. Well, I really appreciate our witnesses who have
taken the time out of what I am sure are very busy schedules to
join us today. Your testimony has illuminated many of the
problems that female business owners face. And I appreciate you
sharing your stories. And of course, your insights and valuable
recommendations for what we can be doing. All of you come from
different communities across the country but you have described
some pretty similar ways that our small businesses really need
support, that women small businesses need support in this
economy because right now what we are seeing is not quite
working. And being the venue to listen and hear from the voices
of small businesses in Washington, we have to work as a
Committee to remove the obstacles and barriers that we heard
about today so that we can get the playing field leveled. And
without a full recovery for women-owned businesses, we are not
going to be able to move past the economic crisis that we have
seen because of a public health crisis that we have been in.
And I am looking forward to working with my fellow Committee
Members to address the issues that we have heard about today
and build a better economy for female entrepreneurs and for
their employees.
I would ask unanimous consent that Members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, so ordered.
And if there is no further business to come before the
Committee, we are adjourned. Thank you.
[Whereupon, at 11:24 a.m., the subcommittee was adjourned.]
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