WIPP Works in Washington: The Complicated Business of Changing Investment Behavior

I don’t know if you watch the Oscars, or like me, go to a party having barely seen any of the movies. I am usually pretty bored with the thank-you speeches from the winners, but this year one acceptance speech got my attention. It was the speech from the winner of

Anne Sullivan

Ann Sullivan, WIPP Chief Advocate

Best Actress, Frances McDormand, for her role in “Three Billboards Outside Ebbing, Missouri.” Referencing women in the audience who “had stories to tell and projects to finance,” she said, “don’t talk to us at the parties tonight, invite us to your office in a couple of days…and we’ll tell you all about them.” She asked the women to stand and told Meryl Streep, “if you do it they’ll all do it.”

The speech caught my attention because women entrepreneurs in all industries including Hollywood share the same vexing problem—access to capital. A damning statistic, women only receive 4% of all commercial loan dollars and 2% of venture capital, shows women entrepreneurs struggle with obtaining adequate capital. Yet, over 36% of businesses are women-owned and are growing at four times the rate of businesses owned by men, so it appears there is no shortage of women seeking operating or investment capital.

Asked why women get so little VC money in Fortune article, Julie Wainwright, founder and CEO of a consignment website The RealReal, thinks it comes down to the lack of female VCs. “When you have different businesses that aren’t proven that may appeal more to a female [customer], a female investor is going to be able to evaluate that” better than a male investor could, she says. “I think in general, most VCs are trying to do their jobs, but there are a lot of unconscious biases.”

A study from Harvard Business Review also points to an additional reason for this deficit—male and female entrepreneurs are asked different questions by VCs, which in turn affects the level of funding they receive. According to the study, when investors asked male entrepreneurs questions they used a promotion orientation, meaning they focused on their hopes and achievements. Alternatively, when questioning women entrepreneurs, they mostly used a prevention orientation, which focused on questions regarding responsibility, security and vigilance. Researchers found that this has a substantial impact on funding outcomes, thus helping to explain the large disparity in VC funding for women entrepreneurs.

Given these barriers, why are so many women starting businesses? It seems to boil down to two reasons: they were either inspired or frustrated. Inspired because they had a good idea, built a better “mousetrap” or decided to create wealth for their families by taking the risk of entrepreneurship. Frustrated because they weren’t getting equal pay for equal work, were tired of a hostile work environment or saw no ability to advance.

A case study by the National Women’s Business Council highlights both of these. The study examined reasons why women become necessity entrepreneurs and of the nine women interviewed, eight cited gender-specific issues, thus making entrepreneurship a necessity. The study also highlights the financial need as the driver to start businesses. “I can relate to many of these women because I’m a prime example of a necessity entrepreneur,” said Kari Warberg Block, NWBC council member and founder and CEO of EarthKind®. “I was fresh out of alternatives with no job options, and I had to do something, anything, to take care of my family. I had an idea to create a safe, natural option for pest control, and 10 years later that has turned into a $20 million-dollar business.”

What are some of the solutions to this vexing problem? Unfortunately, there is no silver bullet but rather a host of solutions necessary to turn this tide. For starters, investors and lenders can start asking the right questions and including women in their review process. Women who sit on the boards of these companies can monitor lending/investing in women-owned companies. And on the policy front, WIPP’s Economic Blueprint suggests a host of policy changes that will help.  They include understanding the data from lending institutions with respect to lending to women, freeing up a regulatory environment that discourages smaller banks from lending to small businesses and developing a track for women to become investors through government backed programs like the Small Business Investment Companies. Lastly, Congress should require a comprehensive review of the Small Business Innovation Research program, which awards only 16% to women.

Even though access to capital for women business owners requires changing cultural biases and policies, all of us can start by educating those around us. If one of us stands up, everyone will stand.

SBA: Tell us Which Regulations Bother You

SBA Office of Adocacy.jpg

The SBA Office of Advocacy is continuing to host small business roundtables to hear firsthand from small businesses how they are facing regulatory burdens. WIPP encourages you to consider which regulations are problematic for your business and share them with the Office of Advocacy. The best way to do that is to attend one of their meetings!

Roundtables:

Detroit, MI – March 13 – Register HERE

Milwaukee, WI – March 16 – Register HERE

San Antonio, TX – March 19 – Register HERE

Houston, TX – March 20 – Register HERE

Philadelphia, PA – March 22 – Register HERE

Atlanta, GA – April 10 – Register HERE

March Policy Update

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Policy Upate Graphic.pngSCOTUS Punts on DACA (For Now)

Last week, the Supreme Court sent the Trump Administration’s appeal on the President’s order to cancel DACA back to the 9th Circuit Court of Appeals, leaving the program’s March 5 expiration moot. Dreamers will remain protected from deportation until the Court of Appeals renders a decision, which could take months.

Breaking the Bank: WIPP Weighs in on Access to Capital

The Senate continues working through amendments to bipartisan lending legislation today that would lighten regulations imposed on small and mid-sized banks through Dodd-Frank. WIPP has advocated for ending the “one-size-fits-all” approach by calling on Congress to enact legislation to address the regulatory relief needed for smaller lending institutions, thus freeing up capital for small businesses.

Read the Economic Growth, Regulatory Relief, and Consumer Protection Act here. Read WIPP’s Breaking the Bank platform here.

WIPP Urges Expansion of Association Health Plans

In January, the Department of Labor issued a proposed rule that would expand participation in Association Health Plans for small businesses and the self-employed. WIPP urged the department to implement a program that maximizes the number of businesses that can participate in the plans, so that women business owners can provide more choices for affordable health insurance.

Read WIPP’s comments here.

NLRB Reverses Joint Employer Standard

Obama’s legal standard for determining whether joint employers could be held liable for an intertwined business’s workplace issues is back due to a conflict of interest of a board member who did not recuse himself from the case. NLRB granted the parties in the original case the ability to appeal and could rehear the case later this year.

Read the NLRB’s press release here.

Tax Withholding Guidance Released

Taxes 2.jpegThe IRS recently released a notice providing the 2018 income tax withholding tables, showing the new rates for employees. The tables reflect changes made by the tax bill that was signed into law last month, including the increase in the standard deduction, repeal of personal exemptions, and changes in tax rates and brackets. They are designed to work with the Forms W-4 that employees have already filed with their employers.
The IRS is directing employers to implement the new withholding tables as soon as possible, but no later than February 15, 2018. This guidance is the first of several items that the agency plans to release this year in order to simplify the transition of the new rules.
For the IRS’s FAQ on the Tax Withholding Timetables, click here.

Proposed Rule Issued to Expand AHPs

Healthcare.jpgIn October, the Trump Administration issued an Executive Order directing the Department of Labor to expand access to Association Health Plans (AHPs).
On January 5, a proposed rule was published that would expand participation in AHPs for small employers and the self-employed. Specifically, the proposed rule would:
  • Treat AHPs as large employers (flexibility on pricing and products)
  • Relax the requirement that associations must exist for a reason other than offering health plans
  • Relax definition of “commonality of interest” as:
  • 1) Being in the same trade, industry or profession; or
  • 2) Being in the same principal place of business within the same state or common metropolitan area (even if the metro area extends across state lines) to make it easier for employers to group together
The proposed rule would also adopt non-discrimination protections that bar all health group plans from conditioning eligibility, benefits or premiums on health status.
The deadline to submit comments to the Employee Benefits Security Administration within the Department of Labor is March 6. Comments can be submitted here.

Need For 7(a) Lending Addressed in CR

WIPP and SBALinda 2.jpgAdministered by the Small Business Administration, the 7(a) loan program is a loan guarantee program designed to encourage lenders to provide loans to small businesses that might not be able to otherwise obtain financing. During the first half of FY17, the 7(a) loan program saw an increased demand with approvals 9% higher than in the first half FY16. This lead Congress to include an appropriations provision to increase the program’s authorization limit to $27.5 billion for FY17 from $26.5 billion in FY16.

The just passed continuing resolution to fund the government included a provision on the program. It authorized SBA to use more funding so they could administer the 7(a) program with increased demand.

Government Shutdown Comes to an End

capitol building.pngAfter a three-day shut down, Senate leaders reached an agreement to fund the government through February 8. The Senate voted 81-18 to pass the measure, shortly followed by the House, which passed it 266-150. The deal was based on a commitment by Senate Majority Leader Mitch McConnell (R-KY) to find a solution for Dreamers to remain in the U.S. until February 8. The agreement includes:

  • Authorizes the Small Business Administration to shift funding to administer increased 7(a) loan demand
  • Delays the re-implementation of the Obamacare medical device tax through 2019
  • Delays the re-implementation of the tax on “Cadillac” health plans through 2022
  • Suspends the Obamacare tax on insurance providers for 2019
  • A provision to provide back pay to workers who were briefly furloughed
  • A six-year extension of the Children’s Health Insurance Program (CHIP)

The continuing resolution (CR) includes other provisions which can be found here.

This is the fourth CR for FY18. As a reminder, a CR funds the government at current levels, in this case, FY17 levels. Having trouble keeping track of the CRs for FY18? See below.

CRs for FY18

  • September 30, 2017: First Deadline for FY18 – CR extended funding through December 8, 2017 (passed by Congress on September 8)
  • December 8, 2017: Second Deadline for FY18 – CR extended funding through December 22, 2017 (passed by Congress on December 7)
  • December 22, 2017: Third Deadline for FY18 – CR extended funding through January 19, 2018 (passed by Congress on December 21)
  • January 19, 2018: Fourth Deadline for FY18 – CR extended through February 8, 2018 (passed by Congress on January 22)
    • Note: The House passed a CR on January 18 to fund the government through February 16. After House passage, the Senate amended the CR by changing the expiration date from February 16 to February 8 and including the back-pay provision. The Senate then passed the amended bill yesterday afternoon, with the House following suit on January 22.  President Trump signed the bill into law that night.
Members Answer WIPP’s Call to Action!
On January 19, as the Senate was trying to find a way to keep the government open, we issued and Action Alert asking WIPP members to contact their senators about the shutdown. We’re proud to report that the Action Alert resulted in nearly 50 letters sent to Senators urging them to keep the government operating and telling them that shutdowns are bad for women business owners.
Thank you for making your voice heard and watch for future opportunities to engage!

2018 will be a big year for WIPP. Please join us!

January Letter From WIPP President Jane Campbell

Happy New Year!

Washington was hit by a deep freeze at the beginning of January, causing a bit of a slow start for Congress. But national politics has already resumed its’ torrid pace.

Jane Campbell photo

WIPP President Jane Campbell

Don’t worry, Women Impacting Public Policy, with cool heads and thoughtful deliberation, will continue to advance and advocate for meaningful public policy that has a positive impact on women business owners. 

We are off to a great start. This week, we held an informative and well-attended policy briefing to help our members understand the intricacies and impacts of new developments, like the tax law, in Washington. This will be a new monthly series where members can ask WIPP’s Chief Advocate Ann Sullivan and me questions about the rapidly shifting policy landscape.

On top of our policy work, we are planning a new series of ChallengeHER events across the country to deliver the information and connections women need to succeed in government contracting. We are also busy lining up an informative slate of GiveMe5 webinars to provide members with government contracting knowledge delivered by experts in the field. From taking the first steps into contracting to learning what to do once you’ve landed a big government contract, these webinars are an indispensable resource!

As you can see, WIPP is on track to accomplish many amazing things this year. But it’s your voice and membership that makes us powerful in Washington. And it’s more important than ever that women entrepreneurs make their voices heard. After all, if we are not at the table, we will only get the scraps.

WIPP is a nonpartisan organization that brings women from all walks of life and both sides of the aisle together to speak with one voice about what women in business need to succeed. Please consider joining us today.

Jane Campbell
WIPP President

2017: A Banner Year for WIPP & Women Business Owners

WIPP was busy this year educating policymakers, women business owners, the media and the public about what women business owners need to succeed. From bringing women entrepreneurs directly to some of the most powerful lawmakers in the country, to meeting women entrepreneurs where they live and do business to educate them on how to bolster their businesses, WIPP was at the forefront of issues impacting women in business in 2017.

A sampling of our (many) accomplishments are highlighted below:

Educating Thousands of Women Business Owners Nationwide

  • WIPP held 12 ChallengeHER events in cities across the country, training more than 2,100 women on the best practices for success in federal contracting; including 5 match making events with federal agencies and primes.  WIPP has educated more than 10,000 attendees through its classes that range from those who are new to the process to those highly experienced. Learn more about ChallengeHER, and read about some of the success stories that have come out of the program.
  • WIPP produced 30 Give Me 5 training webinars increasing the free, on-line curriculum to approximately 120 downloadable recordings.  Reaching over 3,000 people this year, these training webinars were taught by industry specialist and federal contracting experts.
  • More than 200 women business owners joined WIPP and Chicago Treasurer Kurt Summers for a discussion on venture funding and women owned small business. The discussion explored how to encourage venture capital investment in women, the process of lending for SBICs, and how women business owners can approach venture capitalists.

Impacting Policy at the Highest Levels

  • The president signed the 2018 National Defense Authorization Act (NDAA) into law, which includes a provision directing the Small Business Administration to study small business participation on Multiple Award Contracts. The SBA study is in response to a WIPP report revealing that women small business owners are being shut out of large government contracts. Learn more about WIPP’s study.
  • WIPP surveyed 515 WIPP-affiliated women business owners nationwide on how they use the tax code and worked with American University’s Kogod Tax Policy Center to use the survey data to research how the tax code impacts women business owners. The survey data – together with Kogod’s review of existing tax research on the topic – suggests that many women-owned companies are unable to fully access more than $255 billion worth of tax incentives Congress has designed to help small businesses. The study was picked up exclusively by the Associated Press and was featured in hundreds of papers across the country. Learn more about the report in an op-ed WIPP President Jane Campbell authored in Entrepreneur magazine.
  • WIPP brought women business owners to Washington to testify at tax hearings and help inform the framework for the House Small Business agenda.
  • WIPP’s Economic Blueprint, which outlines a range of economic policy recommendations lawmakers can follow to help women entrepreneurs thrive, was featured in Forbes. Read WIPP President Jane Campbell’s op-ed outlining WIPP’s Economic Blueprint in The Hill.
  • WIPP secured powerful politicians to speak at WIPP’s annual conference so they could hear directly from women business owners on what they want out of Washington. Lawmakers included House Ways and Means Chairman Kevin Brady (R-TX), Sen. Joni Ernst (R-IA), House and Senate small business committee tax experts and Senate Small Business Committee leadership.
  • WIPP’s advocacy efforts throughout the tax reform debate—which included submitting comments to the Senate Finance Committee urging parity for pass through entities and repeal of the estate and AMT taxes—were instrumental in securing a pass-through carve out, along with the agreement to double the estate tax exemption from the current $5.6 million per individual to $11.2 million ($22 million for couples). WIPP members authored op-eds, letters to the editor and did interviews with reporters on the issue to ensure the women-owned business perspective was breaking through.
  • WIPP’s advocacy team worked to maintain funding for programs important to WIPP, such as the Women’s Business Centers, microloan lending programs and more.
  • WIPP submitted testimony to Congress and statements to the media urging stability of the small business health insurance marketplaces and that Congress keep in place a pooling mechanism for small businesses to buy health insurance.
  • WIPP encouraged the Consumer Financial Protection Bureau to support the implementation of Section 1071 of the Dodd-Frank Act requiring financial institutions to gather and report data on small business lending, including applications made by women and minority owners. Read our press statement and our comments to the CFPB.
  • WIPP supported the Promoting Women in Entrepreneurship Act.
  • WIPP was mentioned in more than 60 news articles in 2017, ensuring the women business owner perspective was heard throughout national debates around tax reform, the federal budget, entrepreneurship and more. We had articles in Forbes, Entrepreneur Magazine, Financial Times, The Hill newspaper, The Atlantic, the Business Journals, Reuters, the Associated Press, Morning Consult, Bloomberg, the Chicago Tribune, NBC and many more.

Supporting Small Businesses on Small Business Saturday

  • 2017 saw record support from business organizations through the Small Business Saturday Coalition, the national grassroots initiative that WIPP leads to promote Small Business Saturday, with more than 575 organizations nationwide supporting small businesses on Small Business Saturday—an 18% increase over previous years.
  • Organizations WIPP engaged to support Small Business Saturday included the National Retail Federation, Association of Women’s Business Centers, U.S. Black Chambers, Inc., and SCORE, as did local organizations such as the Chicago Public Library, San Francisco Chamber of Commerce, Main Street Iowa and many, many others.
  • WIPP’s leadership around the Small Business Saturday Coalition was instrumental in promoting 7,200 events and activities celebrating Small Business Saturday nationwide, engaging more than 2.2 million small businesses.
  • The Coalition secured 653 mayoral proclamations in support of Small Business Saturday nationwide and ensure numerous public service announcements were issued promoting the day.
  • WIPP secured passage of a Senate Resolution designating Small Business Saturday and introduction of House Resolution and engaged 240 Members of Congress in Small Business Saturday activities.

News You Need to Know: December 2017

Emily Murphy

Longtime WIPP friend Emily Murphy, right, was sworn in as GSA administrator this week. She’s pictured here with WIPP Chief Advocate Ann Sullivan at the ceremony.

Longtime WIPP Friend Emily Murphy Sworn in as GSA Administrator

Longtime WIPP friend Emily Murphy, was sworn in as the 41st administrator of the General Services Administration (GSA) this week. Murphy’s Senate confirmation was strongly bipartisan, with leaders on both sides of the aisle praising her experience, qualifications and commitment to public service. The Senate’s unanimous consent decision came after Murphy’s confirmation hearing before the U.S. Senate Committee on Homeland Security and Governmental Affairs, where she discussed her key priorities and vision for advancing the agency. Murphy will lead a workforce of 11,600 full-time employees and oversee approximately $54 billion in annual contracts.

“I look forward to working with our partners in industry, customer agencies, and Congress so that GSA can continue to fulfill its mission of providing the best value in real estate, acquisition, and technology services to government and the American people,” Murphy said last month.

Deadline to Apply for 2018 Health Coverage Friday

The final deadline to apply for 2018 health coverage at HealthCare.gov is this Friday, Dec. 15. Visit www.HealthCare.gov now to apply. You can also find a host of nonpartisan information about health coverage costs, requirements and options on the Kaiser Family Foundation website.

Burdensome Regulations

The SBA Office of Advocacy is asking for input on burdensome regulations as part of the office’s Regulatory Reform Efforts. You may fill out the form at www.sba.gov/advocacy. You don’t have to an expert to comment. The office is seeking to engage small business owners on their everyday pain points with respect to federal com