By: Debbie Kobrin, WIPP Government Relations
WIPP has consistently advocated for increased female participation in venture funding. Last week, SBA confirmed WIPP’s conclusions with the release of Measuring the Representation of Women and Minorities in the SBIC Program – a groundbreaking study showing that women at small business investment companies (SBICs) play an important role in bridging the lending gap to women-owned firms.
The SBIC program is a multi-billion-dollar investment program that bridges the gap between entrepreneurs’ need for capital and traditional venture financing. SBICs match SBA guaranteed loans with their own funds and utilizes professional fund managers to identify and finance promising small businesses. With a current portfolio of $26 billion, the program has invested in some of our nation’s most iconic brands including Apple, Tesla, and FedEx.
Overall, the SBIC program has been successful, though it has failed to serve women and underrepresented individuals as well as it should. To better understand this challenge, SBA commissioned a report that found when women and underrepresented individuals are the investors, they are more likely to invest in firms like themselves.
The report also found greater gender diversity among SBIC investment teams than is present in the broader venture capital and private equity community. Nearly 12% of SBIC funds have women on their investment teams, compared to less than 8% in the private equity industries. While SBIC funds are reaching more women than private funds, it is still nowhere near enough.
As WIPP’s access to capital platform Breaking the Bank indicates, venture capital is still too elusive for women-owned firms. Venture capital is a classic “chicken and egg problem”, too few women serve on SBIC boards, which leads to the cyclic exclusion of women-owned firms from SBIC investments.
To increase the number of women and underrepresented individuals on SBIC and corporate boards SBA, LinkedIn, WIPP, and other partner organizations have created the Open Network for Board Diversity, or ONBOARD.
ONBOARD is an online platform that serves as an opportunity for women to be more involved in equity-based financing. By providing more opportunities for women to serve on corporate boards, we will increase opportunities for women-owned firms. To join ONBOARD, click here or by search “ONBOARD diversity” in the Linkedin search bar.
To learn more about ONBOARD please watch Give me 5: ONBOARD: Open Network for Board Diversity presented by SBA, and hosted by WIPP’s Chief Advocate, Ann Sullivan.