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WIPP Champions Investment Breakthrough with Equity Bill

Posted By Laura Berry, Wednesday, July 10, 2019
Updated: Monday, July 15, 2019

 

Championed by WIPP, The Women and Minority Equity Investment Act of 2019 (S. 1981) allows women-owned federal contracting firms to take investment by women-owned equity firms and still meet the “51% unconditionally owned and controlled” standard set by SBA to participate in the WOSB/EDWOSB program. WIPP also brought the minority-owned firms along with us in this legislation, allowing for minority-owned firms to invest in minority-owned companies. We thought it was important and the right thing to do.

 

According to my friends, Amy Millman, who runs Springboard Enterprises, and WIPP Member Sue Malone, who funds small businesses through equity investments, the legislation introduced by Senators Maria Cantwell (D-WA) and Marco Rubio (R-FL) solves a problem that has been discussed for 20 years. Representative Robin Kelly (D-IL), the first elected official to identify this problem, introduced a similar bill in the House, H.R. 3633.AnnSullivan

 

It should come as no surprise that the numbers are abysmal when it comes to equity investment in women. According to the press release issued by Senator Cantwell's office: “[The] percentage of women-owned businesses rose from 4.6% in 1972 to 40% in 2018, but they still receive less than 4% of venture funding.” Equity investment is a term that encompasses venture capital, private equity, and angel investment. Equity simply means ownership. In exchange for a percentage of ownership, the investor provides capital. An example of this investing at a very basic level is the TV show Shark Tank.

 

The flip side of the coin is that a major obstacle to investment in women-owned companies is that not enough women are investors. Only 8% of investing partners at the top 100 venture firms globally are women, according to an analysis by TechCrunch. Additionally, Fairview Capital’s 2018 Market Review of Woman and Minority-Owned Private Equity Firms shows significant growth in funds owned by women or minorities. The estimated 312 private equity firms have doubled since 2015 and represent roughly 10% of the market. 

 

Currently, if a woman-owned firm wanted to obtain an SBA certification to participate in the WOSB/EDWOSB procurement program, she basically has to swear off any investments. We know a number of cases where women who took equity investment had to shut down their government business, which is completely counterproductive to the SBA’s mission. 

 

This legislation is groundbreaking on both sides of the women-owned equation. It not only opens a path for investment in women-owned businesses who are government contractors, but also strengthens women investors, giving them a reason to ask for greater equity positions within their firms. It has been suggested to us that giving an incentive to women-owned equity firms to invest might change the dynamic in those firms. Women-owned companies looking for investment will be incentivized to ask for women-owned investment firms—we hope this will work favorably both ways. The same holds true for minority investments under this new legislation.

 

Any day now, a similar bill will be introduced in the House of Representatives. We fully anticipate this legislation will make it into law, doing away with a long-standing impediment to accessing capital. 


“We all know that access to capital is a barrier to entry and growth for women owned businesses,” stated WIPP’s President & CEO Candace Waterman upon introduction of this legislation. “This bill will not only assist these businesses, it will have a positive impact on the financial industry, as it will spur growth for women-owned equity/VC firms. We applaud Senators Cantwell and Rubio for leading this breakthrough on an issue that has been an impediment to women’s business growth.”

Tags:  Advocacy 

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Knowing the Game Changers

Posted By Ann Sullivan, WIPP Chief Advocate, Wednesday, June 5, 2019

When I started representing WIPP in Washington some 17 years ago, Republican George W. Bush was in his second year as President and Senate Democrats held their majority by a very slim margin, while the House was controlled comfortably by Republicans. Women held 62 seats in the House and 13 seats in the Senate. No women chaired Congressional Committees and two women held Cabinet posts – Ann Veneman (Department of Agriculture) and Elaine Chao (Department of Transportation).

 

Things are a little different now— but maybe not as much as one might think. President Donald Trump is also a Republican, but this time the Senate is controlled by Republicans and Democrats control the House. But the game changer is women in power. As of January 2019, there are 106 women in the U.S. House of Representatives, including delegates, and 25 women in the Senate. Seven women head Congressional Committees—not to mention Speaker of the House Nancy Pelosi, who is second in the presidential line of succession, after the vice president.

AnnSullivan

 

 Even though there were relatively few women in Congress, in those early days there were a few game changers—Senator Kay Bailey Hutchison and Senator Olympia Snowe. Senator Hutchison was the head of the Republican Policy Committee in the Senate and included us in her monthly meetings, even though we were the only women in the room. Senator Snowe supported women business owners from her position on the Small Business Committee highlighting our issues.

Today, women-owned companies in the United States make a much bigger impact than in 2002. Women owned 6.5 million nonfarm U.S. businesses in 2002, employing 7.1 million people and generating $939.5 billion in business revenues. The latest numbers, by contrast, show women own 10 million firms, generating $1.4 trillion in receipts and employing 8.4 million.

 

WIPP was founded because women business owners were not well understood and did not have “a seat at the table.” Routinely left out of important agency and Congressional meetings, women pressed for a bigger presence. Making a difference in public policy was, and is to this day, WIPP’s mission. WIPP’s first example of making a big difference was pushing for a federal program which set aside federal contracts to women-owned companies. The women’s procurement program rallied women all over the country who believed that resistance to implement this law was just plain wrong. The game changer was locking down Presidential candidate support for implementation and when President Barack Obama won – it was one of the first things he did. Our strategy of presenting our platform at both conventions attended by powerful women in both parties and our members worked.

 

With WIPP’s legislative and regulatory victories, our narrative started changing. We no longer asked for a “seat at the table.” We had it. Rather, we were seated at the head of the table. Congressional Members, staff and committees consult our organization and its members for views and testimony on every aspect of policies affecting entrepreneurs. SBA became our partner through ChallengeHER, educating women nationwide on working with the private sector. Lastly, we became an integral part of the small business community and worked diligently to build a cohesive coalition with all other parts of the community – another game changer.

Changing the game has been in WIPP’s DNA since its inception. In June, there are two additional opportunities to lead. First, the Senate will hold a hearing on contracting issues with an eye to making the small business programs more effective. WIPP will testify, addressing the disappointing performance of the WOSB/EDWOSB program and efforts to increase federal contracts to women-owned businesses.


The second opportunity is the 2019 WIPP Business Leadership Conference. Participation, just like those early days, requires everyone’s attendance. WIPP visits to Capitol Hill has never been more important. Our visibility helps all women entrepreneurs across the country, even though they may not even be aware of our efforts. Our attention to issues such as business growth requires action and this conference provides opportunity for engagement with Congressional Members and staff.

 

Unlike the early days, we are not begging for a seat at the table. But now that we have a seat, it is our responsibility to do something with that seat. Get involved. Add your voice.


Tags:  Advocacy  Congress  leadership  WIPP Annual Conference 

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Action Alert: Women Business Owners Need Sole Source Parity

Posted By WIPP Advocacy Team, Wednesday, May 15, 2019
Updated: Thursday, May 23, 2019

WIPP strongly supported Expanding Contracting Opportunities for Small Businesses Act of 2019 (H.R. 190), which will give all small businesses greater opportunities through sole source contracting. Women business owners have the chance to affect this action in the Senate. But we need your help.

 

Now is your chance to get involved in our advocacy efforts. Please meet, call, or write your Senators to urge them to introduce a bill that mirrors H.R. 190 and open doors for women business owners.

 

Need more background?

WIPP fought and won sole source authority for the WOSB program in 2015—gaining parity with other federal contracting programs. While the fight has changed in 2019, the drumbeat is the same: parity.

Currently, the sole source dollar limits are $4 million and $6.5 million (construction and manufacturing) over the life of the contract. For government contractors, these amounts are small.

WIPP supported the H.R. 190, which passed the House and will give all small businesses including WOSBs greater opportunities through sole source contracting. The bill would raise the dollar amount for construction and manufacturing to $7 million and allow the amounts of $4 million and $7 million to be awarded each year, instead of over the life of the contract.

Please help us amplify this message by meeting, calling, and/or writing your Senators to urge them to introduce a bill that mirrors H.R. 190 and open doors for women business owners.

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WIPP Driving Legislation

Posted By WIPP Advocacy Team, Thursday, May 2, 2019

Two recent bills introduced in the House and Senate, respectively, incorporate WIPP’s recommendations for increasing access to capital and creating parity for women-owned small businesses:

 

  • Making the Microloan Program More Effective: Elimination of the SBA Microloan Program’s 1/55th rule is a top WIPP priority, and the Microloan Program Enhancement Act (S. 996) would accomplish that. Women consume 48.7% of loans through the Program, which assists borrowers obtaining loans under $50,000. Read our letter of support.
  • Requiring 15-Day Payment to Small Federal Contractors: Reinstating the accelerated payments policy for small contractors and subcontractors that expired in 2017, House Small Business Committee Members introduced the Accelerated Payments for Small Businesses Act (H.R. 2332). The bill sets a goal for federal agencies to pay both small prime contractors and large primes with small subcontractors within 15 days.

Tags:  Advocacy  legislation 

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WIPP Asks Congress to Fund Critical Entrepreneurship Resources for FY2020

Posted By Admin, Tuesday, April 30, 2019

 

It’s appropriations season in Washington and WIPP recently submitted formal FY2020 Appropriations Requests to Congress. WIPP is advocating for robust funding for SBA Programs, including Women’s Business Centers (WBCs), the Microloan Program, the SBA Office of Advocacy and the National Women’s Business Council (NWBC). WIPP’s past requests and advocacy for these programs have helped ensure Congress funds them at strong levels. 


The House Appropriations Committee will begin holding hearings for FY2020 funding in early summer, with the Senate to follow shortly after. Read WIPP’s FY2020 Appropriations Request Letter.

 

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What Is "NDAA" and Why Do I Keep Hearing About It?

Posted By Ann Sullivan, WIPP Chief Advocate, Tuesday, April 30, 2019
Around this time of year, you will start to see communications from the WIPP Advocacy Team around getting legislation important to women-owned businesses “into the NDAA.” If you have been around long enough, you have probably heard me decode this legislative strategy. WIPP has used this vehicle to pass a number of bills into law – including sole source authority for WOSBs in the FY2015 NDAA. So, the question is, how can legislation about small business wind up in something authorizing defense? Let’s start with a little history of the Act.
AnnSullivan
The National Defense Authorization Act (NDAA) is one of the last “must pass” pieces of legislation left in Congress. Since the Constitution requires that Congress provides for a common defense, this bill is considered to be “must pass.” Therefore, every year for the past 58 years, Congress has passed the NDAA. Not to be confused with defense appropriations, with “defense” in the title, the purpose of the massive bill is to authorize defense policies and programs under which the funding levels are set. 

Even though the bill is “must pass,” that does not necessarily mean it must pass on time. In 33 years, the NDAA has been passed only three times before the start of the new fiscal year. However, one of the three times was last year’s FY2019 NDAA. The other two years the NDAA was signed on time were FY1997 and FY1978. ***Note: the calendar year the bill is passed and the fiscal year for the NDAA do not align. Congress is always working on it for the next fiscal year; therefore, Congress is currently working on the FY2020 NDAA. 

So where does small business enter the mix? The bill falls under the jurisdiction of the Armed Services Committees in both the House and Senate, not the Small Business Committees. Each year, both sides of Congress craft their own version of the NDAA to pass in their respective chambers. Next, they come together with negotiators and hammer out the differences. Since this is not under Small Business Committee jurisdiction, adding small business provisions is a more internal process. Meaning, you won’t see us tell you about a public hearing to review proposed small business provisions, instead the House and Senate Small Business Committees work with the Armed Services Committee Members to include relevant small business provisions. The NDAA has not always had small business changes. In recent years, small business advocates in Congress realized that a stated U.S. national security policy—the need for a strong industrial base— justifies inclusion of small business legislation. The NDAA quickly became the go-to legislation for procurement changes to small business programs.

A prime candidate for inclusion this year is a bill that would help bring parity to sole source authority for small businesses, especially WOSBs/EDWOSBs. The Expanding Opportunities for Small Businesses Act of 2019 (H.R. 190) would increase sole source contracts for women, veterans, and HUBZones at the amounts of $4 million and $7 million each year, instead of the life of the contract. It also raises the sole source dollar threshold for construction and manufacturing from $6.5 to $7 million. This legislation passed the House and is ready for Senate action. With category management shifting the way the government buys, contracting officers will have a bigger incentive to award work to small businesses if this bill passes. It’s time to mobilize around this huge opportunity for women-owned small businesses. The NDAA might just be the mechanism to get it done. 

Tags:  Advocacy  legislation  policy 

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Capital Access for Women a Growing Priority for DC Lawmakers

Posted By Jennifer Mangone, WIPP Advocacy Team, Monday, April 22, 2019
Updated: Tuesday, April 30, 2019
March was a busy time for WIPP here in Washington. From testifying before the House Small Business Committee (HSBC) to hosting forums on women’s entrepreneurship in both the House and Senate, the importance of WIPP’s 2019 Policy Pillars was heard ‘round the Hill. After all that work in such a short span, one of our Pillars, Increasing Access to Capital for Women-Owned Businesses, is already gaining traction through legislation on the SBA Microloan Program.

The Microloan Program assists entrepreneurs in obtaining loans under $50,000. SBA provides nonprofit intermediary lenders with direct loans. Intermediaries, in turn, provide Microloans to small businesses. At 48.7%, women are the greatest consumers of these Microloans.

Testifying on behalf of WIPP in a HSBC hearing on Modernization of the Microloan Program, Michelle Richards, Executive Director of the Great Lakes Women’s Business Council, called the 1/55th rule the number one pain point for microlenders and advocated for its elimination in any modernization of the program. 

The 1/55th rule, which was implemented as part of the pilot program in 1991, requires that for the first half of each fiscal year the lesser of $800,000 (or 1/55th of available loan funds) is made available to loan intermediaries in each state. This rule restricts the availability of capital for small businesses in larger states.

Our team worked closely on this issue with Senator Tammy Duckworth (D-IL), who just introduced the Microloan Program Enhancement Act. The bill adopts two of WIPP’s key recommendations on improvements that should be made to the Microloan Program.

First, the bill would eliminate the 1/55th rule. Second, Senator Duckworth’s bill would require SBA to make publicly available previously unreleased data, another prime recommendation from WIPP’s testimony. The data would include the number of small businesses that remain in business, the number of jobs created and retained, and the impact of the elimination of the 1/55th rule on rural areas by consumers of the Microloan Program.

Meanwhile, back on the House side, Rep. Scott Tipton (R-CO) recently used a hearing in the House Financial Services Committee (HFS) with CEOs of large banks as an opportunity to ask the CEO of Goldman Sachs about initiatives to right the discrepancies in investment to women-owned businesses. Rep. Tipton is the Co-Chair of the House Small Business Caucus and co-led a roundtable on women’s entrepreneurship with WIPP last month.

Today, only 16% of conventional loans and 4.4% of commercial loan dollars go to women-owned businesses. WIPP will continue to push for increased access to capital for women and applauds those in Congress like Senator Duckworth and Congressman Tipton, who are pushing with us.

Tags:  access to capital  microloan  SBA 

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Senate To Reauthorize SBA Programs For First Time in 8 Years

Posted By Administration, Monday, April 15, 2019
Updated: Tuesday, April 30, 2019
The Senate Small Business Committee has started the process of reauthorizing all of the programs in the Small Business Act. This is no small feat – reauthorizing includes taking a look at SBA’s contracting programs, entrepreneurial development programs, and access to capital programs, just to name a few. 

In the past, the Committee reauthorized the entire Act every three years, but in 2011, Congress stopped all together. Senate Small Business Committee Chair Marco Rubio (R-FL) is looking to modernize the programs and improve their management at SBA. The Senate Committee will hold hearings over the next few months examining these programs. Visit the schedule of hearings.

Tags:  Senate small business 

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Mounting Debt

Posted By Ann Sullivan, Wednesday, April 3, 2019
Recently, I heard Congressman Chip Roy from Texas state that the U.S. accumulates $100 million in debt every hour. That is a staggering, unsustainable number. It begs the question – is anyone in Congress concerned about this mounting debt, given that it is budget season? Does anyone care?

AnnSullivan According to the former Treasury Secretary Robert Rubin, “Despite rising debt, interest rates have remained low, and a fiscal crisis has not occurred. That is because private demand for business investment has been sluggish in a slow recovery, the Federal Reserve has provided liquidity through its unconventional monetary policy, and financial markets often ignore unsustainable fiscal conditions for an extended time.” He goes on to say: “Now, the imperative must be to develop a political strategy, and, in that context, a narrative, that persuades the broad American public that its economic well-being depends on getting our fiscal house in order.”

Given the absence of a financial crisis, elected officials have not convinced the American public that mounting debt, even to the tune of $100 million an hour, requires action. The place where fiscal policy starts is the Senate and House Budget Committees. Since the Senate Budget Committee just passed their FY2020 budget resolution, it is instructive to note the positioning of both sides. The Republican-controlled Senate Committee lauded the plan as cutting half a trillion dollars in deficits and debt over the next five years. According to the Chair, Senator Mike Enzi (R-WY), the Senate Resolution does not increase budget caps put into place in 2011 by the Budget Control Act, thus limiting spending.

In contrast, the top Senate Democrat on the Committee, Senator Bernie Sanders (I-VT), said this: “The Senate Republican Budget is immoral and bad economic policy. In almost every instance this budget ignores the needs of ordinary Americans and what the American people want, while at the same time protecting the interests of the wealthiest and most powerful people in this country – many of whom are the largest GOP campaign contributors. This is a budget that moves this country rapidly in the direction of oligarchy. It constitutes a massive transfer of wealth from the working class to the billionaire class.”

The House Budget Committee, controlled by Democrats since January, has not yet announced its deliberation schedule on the FY2020 budget. However, there appears to be disagreement on the levels on non-defense spending among Democrats. The Chair, Representative John Yarmuth (D-KY), is pressing to lift the spending caps imposed in 2011, allowing the Congress to spend more money without requiring spending cuts to offset the decreases.

So much for a political strategy. And frankly, so much for public engagement. While some in Congress have sounded the alarm, there appears to be little appetite for making hard choices necessary to reduce the debt.

Meanwhile, while I have been writing this article, the debt just went up another $100 million. Reduction of the debt falls into the same bucket many other issues facing our country drop into—solving problems only when a crisis demands it. Short of a voter groundswell, the debt will keep piling up. You should know where your Congressional delegation stands on this important issue. Are they concerned? Have they proposed any solutions to reducing the debt? Or are they waiting for a financial crisis to force the issue?

It seems to me that asking elected officials for big solutions is a reasonable request. Answers won’t be formulated unless the voters demand it.

Tags:  Advocacy  budget  Treasury 

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Senate Committee Passes WIPP-Supported Cybersecurity Bills

Posted By Elizabeth Sullivan, Wednesday, March 27, 2019
Updated: Wednesday, April 3, 2019

The Senate Small Business Committee passed two WIPP supported bipartisan cybersecurity bills last week, the Small Business Cyber Training Act of 2019 (S. 771) and the SBA Cyber Awareness Act (S. 772). These bills are a step in the right direction to help small businesses with cybersecurity compliance as well as hold the SBA accountable to secure the sensitive data it collects. The next stop is a vote by the full Senate.

 

WIPP submitted a letter endorsing both bills to Committee Chair Marco Rubio (R-FL).

Tags:  Advocacy  cybersecurity  Senate small business 

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