Assisting Entrepreneurs: Examining Private and Public Resources Helping Small Businesses (House Small Business Committee hearing, June 13, 2023)

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Transcript of the House Committee on Small Business hearing Assisting Entrepreneurs: Examining Private and Public Resources Helping Small Businesses, convened June 13, 2023 during the 118th Congress, First Session, published as Small Business Committee Document Number 118-018 (GPO 52-424). Chairman Roger Williams presided with Ranking Member Nydia Velázquez. Testimony was given by Chris Pilkerton of Accion Opportunity Fund, Reginald Hodges of Training Center of Central Texas, Rich Palmer of Launchpad Ventures, and Sonya Smith of the New York Small Business Development Center. An appendix submission from Brad Thaler of the National Association of Federally-Insured Credit Unions discusses entrepreneur capital access and the Veterans Member Business Loan Act introduced by Senators Dan Sullivan and Mazie Hirono.

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ASSISTING ENTREPRENEURS: EXAMINING PRIVATE
AND PUBLIC RESOURCES HELPING SMALL
BUSINESSES

HEARING
BEFORE THE

COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION

HEARING HELD
JUNE 13, 2023

Small Business Committee Document Number 118–018
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
52–424 WASHINGTON : 2023
HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
BLAINE LUETKEMEYER, Missouri
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
MARIA SALAZAR, Florida
TRACEY MANN, Kansas
JAKE ELLZEY, Texas
MARC MOLINARO, New York
MARK ALFORD, Missouri
ELI CRANE, Arizona
AARON BEAN, Florida
WESLEY HUNT, Texas
NICK LALOTA, New York
NYDIA VELÁZQUEZ, New York, Ranking Member
JARED GOLDEN, Maine
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
GREG LANDSMAN, Ohio
MORGAN MCGARVEY, Kentucky
MARIE GLUESENKAMP PEREZ, Washington
HILLARY SCHOLTEN, Michigan
SHRI THANEDAR, Michigan
JUDY CHU, California
SHARICE DAVIDS, Kansas
CHRIS PAPPAS, New Hampshire

BEN JOHNSON, Majority Staff Director
MELISSA JUNG, Minority Staff Director

(II)
CONTENTS
OPENING STATEMENTS
Page
Hon. Roger Williams ................................................................................................ 1
Hon. Nydia Velázquez ............................................................................................. 2

WITNESSES
Mr. Chris Pilkerton, Chief Legal Officer, Accion Opportunity Fund, Tilghman,
MD ......................................................................................................................... 5
Mr. Reginald Hodges, Owner and President, Training Center of Central
Texas, Harker Heights, TX ................................................................................. 7
Mr. Rich Palmer, Managing Director, Launchpad Ventures, Cambridge, MA ... 8
Ms. Sonya Smith, State Director Company, New York Small Business Devel-
opment Center, Albany, NY ................................................................................ 9

APPENDIX
Prepared Statements:
Mr. Chris Pilkerton, Chief Legal Officer, Accion Opportunity Fund,
Tilghman, MD ............................................................................................... 28
Mr. Reginald Hodges, Owner and President, Training Center of Central
Texas, Harker Heights, TX .......................................................................... 30
Mr. Rich Palmer, Managing Director, Launchpad Ventures, Cambridge,
MA .................................................................................................................. 32
Ms. Sonya Smith, State Director Company, New York Small Business
Development Center, Albany, NY ................................................................ 36
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
National Association of Federally-Insured Credit Unions ............................ 43

(III)
ASSISTING ENTREPRENEURS: EXAMINING
PRIVATE AND PUBLIC RESOURCES
HELPING SMALL BUSINESSES

TUESDAY, JUNE 13, 2023

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The Committee met, pursuant to call, at 2:40 p.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams [chair-
man of the Committee] presiding.
Present: Representatives Williams, Luetkemeyer, Meuser, Sala-
zar, Alford, Crane, Bean, LaLota, Velázquez, Landsman,
McGarvey, Perez, Scholten, Thanedar, Davids, and Pappas.
Chairman WILLIAMS. I welcome everybody here today and
thank you for the witnesses and for those who have come to hear
the hearing.
I call the Committee on Small Business to order.
Without objection, the Chair is authorized to declare the recess
of the Committee at any time.
I now recognize myself for my opening statement.
Today’s hearing will focus on examining the public and private
resources available to our nation’s entrepreneurs. And anyone in
our country can become an entrepreneur if they are willing to put
in hard work to bring an idea to life. That is the beauty of our
great country. For many people they do not know where to even
start as they try to accomplish this great objective. They can talk
to their network of friends and family. They can talk to local cham-
bers of commerce or research what resources are available in their
community, whether that be from the private sector or the federal
government.
As we have conducted hearings this year, we have too often
heard that navigating the federal bureaucracy and figuring out
what resources are available can be too challenging for many small
business owners. The data backs up this line as we have repeated
heard 70 percent of business owners give the government a grade
of C or below when asked about the effectiveness of their programs.
While some federal programs can be beneficial to small businesses,
we must ensure that they are being utilized to create successful
businesses. These are ultimately taxpayer funded programs and it
is our duty in Congress to ensure that these dollars are being used
as effectively as possible. The government does not need to create
a new government program and expand government services when-
ever a new problem arises.
(1)
2

Unfortunately, the SBA has done this far too many times and too
often. And while there are programs that have a proven track
record of success just as SBDCs which leverage federal dollars to
state and local partners, but there are others that are not as effec-
tive. For example, the Community Navigators Program received
nearly $200 million over the last few years to do substantially simi-
lar work as other counseling services at the SBA and their per-
formance metrics are abysmal.
As we continually look to make SBA more effective and efficient,
we must look to end this kind of duplication that is wasting tax-
payers’ dollars. Additionally, we have our need to be evaluated, and
if a program is beneficial and deserves funding it is important for
us to know that if the private sector is already stepping up to fill
a specific need. In many cases, the private sector is able to adapt
more quickly to the changing needs of small business.
If we want to help small businesses in Congress, the best thing
we can do is enacting pro-growth policies that make it easier for
them to keep their doors open. Let’s not burden them with exces-
sive regulations. Let’s lower their tax rate so they can keep more
of their hard-earned money. And let’s stop the reckless government
spending that has caused high inflation and high interest rates.
This type of waste across the SBA and other federal agencies leads
to inefficiencies, the misuse of taxpayer dollars, and a bloated fed-
eral government. Simply put, our goal here today is to examine the
landscape of the resources that are available to help small busi-
nesses. Once we have an idea it will make it easier for Congress
to utilize which programs are effective and which ones are duplica-
tive of other resources available to our nation’s job creators.
Small business owners dedicate their lives and finances to the
production of services they bring to the marketplace. We salute the
small businesses who continue to fight and give selflessly back to
their communities, and we are eager to enact policy solutions that
will help pave a path towards success for both now and success in
the future.
I want to thank you all again for being here today, and I am
looking forward to today’s conversation.
So, with that I will yield to our distinguished Ranking Member
from New York, Ms. Velázquez, who just got here.
Ms. VELÁZQUEZ. Yes. Financial Services.
Thank you, Mr. Chairman.
America’s 33 million small businesses are the cornerstones of our
local economies. When a main street business succeeds, we see
hard earned dollars get reinvested back in our communities, along
with robust job creation and local economic growth.
Launching a small business is not for the faint of heart. When
it comes to turning a great idea into a thriving business, entre-
preneurs can face a number of challenges. But that is where the
SBA comes in. The SBA fosters a robust entrepreneurial ecosystem,
one that offers free or low-cost counseling and training to small
business owners throughout the country. Whether it is helpoing to
create a business plan, access capital, or navigate the procurement
process, the SBA offers a wide range of resources to help small
businesses succeed. These programs have a high return on invest-
3

ment. Studies have shown that entrepreneurs who receive coun-
seling and training are able to incase sales and create more jobs.
Every year, SBA resource partners assist more than one million
small business owners. Just imagine how powerful our economy
and workforce will be with additional resources for SBA’s pro-
grams. We could unleash the power of entrepreneurship and inno-
vation in communities all across the United States.
Of particular concern to me are the barriers that women, minor-
ity, and rural entrepreneurs face each and every day. Lack of ac-
cess to capital, mentorship, and vital networks are well-known
challenges for underserved entrepreneurs.
A recent report by the Office of Advocacy confirms that large and
persistent racial disparities in business ownership and outcomes
have existed for some time in the United States. Only 5 percent of
Blacks and 8 percent of Latinos own small businesses compared to
more than 10 percent of non-Latinos/Whites. Moreover, Black and
Latino-owned businesses have lower average sales and hire fewer
employees.
Equally troubling is the fact that roughly 90 percent of America’s
12 million women entrepreneurs are sole proprietors and stay
small. Despite representing more than 50 percent of the popu-
lation, women garner roughly 2 percent of venture-backed capital
in 2022. And while rural communities have a higher rate of self-
employment, they rely more on personal savings to launch a busi-
ness and face acute workforce challenges. We have to break down
the barriers that keep women, minority, and rural entrepreneurs
from reaching their full potential. That means providing small
businesses that are often overlooked with access to capital and
arming them with the resources and technical assistance needed to
grow and prosper. It also means filling the gaps that are not being
met by the private sector and state and local economic agencies.
I am looking forward to today’s hearing and I hope to learn more
about public-private efforts that are underway to help small busi-
nesses thrive. Thanks to all the witnesses for participating, and I
hope we have a productive discussion.
Thank you, Mr. Chairman. I yield back.
Chairman WILLIAMS. Thank you. And I will now introduce our
witnesses. But let me tell you, it is pretty simple. You have got
some lights in front of you and you are going to have 5 minutes
and the lights will turn yellow. They will turn red or whatever.
And if you hear the gavel, you need to cut it off. Okay? All right.
So we appreciate you all being here.
So our first witness today is Chris Pilkerton. Mr. Pilkerton is the
chief legal officer of the Accion Opportunity Fund located in San
Jose, California. Accion Opportunity Fund is the nation’s largest
nonprofit community development financial institution concen-
trating on small business support for underserved communities.
Prior to his time at the Accion Opportunity Fund Mr. Pilkerton
served as acting administrator of the Small Business Administra-
tion during the Trump administration. During his time at the SBA,
he helped coordinate federal, state, and local economic development
efforts to help our nation’s job creators. Mr. Pilkerton earned his
J.D. from Catholic University of America, a bachelor’s degree from
4

Fairfield University, and a certificate in data analytics from Cor-
nell University’s College of Business.
Mr. Pilkerton, thank you for being here today and we look for-
ward to the conversation ahead.
Our next witness today is Mr. Reginald Hodges. I have had the
pleasure of meeting Mr. Hodges several times over the last few
years through all the work he does in the great state of Texas. He
is an owner and president of the Training Center of Central Texas
College located in Harker Heights, Texas. A Former Navy Civil En-
gineer Corps officer, Mr. Hodges has over 11 years of military serv-
ice and over 16 years of construction management experience. Mr.
Hodges started the Training Center of Central Texas with a vision
of training men and women to enter the solar technology field.
Since opening the school, it has expanded their curriculum to in-
clude a variety of programs ranging from dental assistant to sub-
station technician. Mr. Hodges earned his Bachelor of Applied
Science from the University of North Florida and his master’s de-
gree in electronics engineering from California Polytechnic State
University in San Luis Obispo.
So, Mr. Hodges, it is good to see you and thank you foremost for
your service being here today and we look forward to our conversa-
tion ahead.
Our next witness is Mr. Rich Palmer. Mr. Palmer is the man-
aging director of Launchpad Venture Group located in Boston,
Massachusetts. Launchpad Venture Group is an angel investment
group that provides funding and counseling services to early-stage
startup companies. Mr. Palmer is also on the Public Policy Com-
mittee of the Angel Capital Association, and prior to his time at
Launchpad Venture Group he co-founded Gravity Lead Product De-
velopment at Relationship-Science and was the head of the port-
folio analytics for S&P Capital IQ’s Quantitative Intelligence team.
Mr. Palmer earned his Bachelor of Science from Rensselaer Poly-
technic Institute. What are you all? What is your mascot? I got you,
didn’t I? Okay. All right. Polytechnic Institute and received his
Master of Business Administration from Babson College.
Mr. Palmer, thank you for being here today, and we look forward
to the conversation ahead.
And I now recognize the Ranking Member from New York, Ms.
Velázquez, to briefly introduce our last witness appearing before us
today.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman.
It is with greater pleasure that I introduce Sonya Smith from my
hometown state of New York. Ms. Smith is the state director of the
New York Small Business Development Center and has in-depth
knowledge of the challenges our small businesses are facing today.
She has an MBA from Albright College and has risen through the
ranks of the SBDC network. She is the first woman an first African
American to lead the New York State SBDC and I am proud that
she is testifying before our Committee today.
Welcome, Ms. Smith. Thank you for being here. I look forward
to your testimony. I yield back.
Chairman WILLIAMS. Thank you now. And again, we all appre-
ciate all of you being here today.
5

And I now recognize Mr. Chris Pilkerton for his 5-minute open-
ing remarks.
STATEMENTS OF CHRIS PILKERTON, CHIEF LEGAL OFFICER,
ACCION OPPORTUNITY FUND; REGINALD HODGES, OWNER
AND PRESIDENT, TRAINING CENTER OF CENTRAL TEXAS;
RICH PALMER, MANAGING DIRECTOR, LAUNCHPAD VEN-
TURES; SONYA SMITH, STATE DIRECTOR COMPANY, NEW
YORK SMALL BUSINESS DEVELOPMENT CENTER

STATEMENT OF CHRIS PILKERTON
Mr. PILKERTON. Thank you Chairman Williams, Ranking
Member Velázquez, and to all of the Committee Members.
Over the last several years I have spent my career focusing on
issues related to the small business community, with particular at-
tention to underserved populations. I served as the General Coun-
sel of the U.S. Small Business Administration under Administrator
Linda McMahon, as well as the Acting Administrator of the agency
from April 2019 into early 2020 when I joined the White House to
advance the issues that included access to capital and workforce
development. The lessons of those efforts and an associated bipar-
tisan plan going forward have been documented more specifically
in a book I have recently coauthored titled ‘‘Underserved.’’
Since leaving government, I have continued this work in various
capacities. I serve as the Chief Legal Officer for Accion Opportunity
Fund, the leading nonprofit community development financial insti-
tution focused on small business lending and technical assistance
to underserved borrowers all across the country. I have also co-
founded and developed an initiative called the Small Business
Corps at Georgetown University Business School, a private sector
led program to offer underserved small businesses with specific
goal-focused technical support provided by fellows who are recent
college and business school graduates. I have also worked closely
with people like the performing artist Ice Cube to identify opportu-
nities for underserved small businesses to scale and participate in
the Fortune 500 corporate supply chain.
While access to capital to small businesses is critical, academic
analyses have shown that technical assistance and counseling can
be amongst the most meaningful component of a business’ ability
to perform, develop, scale and hire.
There are technical assistance resource partners that have tradi-
tionally been an important part of the small business ecosystem,
organizations such as SBDCs, SCORE, Women’s Business Centers
and Veterans Business Centers.
As this committee is aware, certain funds to support these orga-
nizations are appropriated and then distributed via SBA. I have
worked with all of these organizations and have seen their impact
on the growth of individual small businesses.
Given my experience in this arena, I would recommend this Com-
mittee consider the following methods to advance small business
technical assistance in the United States.
First, for any entity that receives technical assistance dollars
from a government grant or designated appropriation, there must
be a common menu of meaningful performance metrics both before
6

and after distribution of the funds. These metrics must be reason-
able and realistic, but also be significant enough to hold grantees
accountable to the provision of quality services.
Second, technology must be central to this process from start to
finish. Not only should technology be utilized to streamline the ap-
plication process, but the actual technical assistance provided must
have a substantive online learning component as is seen in the
SBA’s Ascent platform, which was championed by Administrator
McMahon and continues to be highlighted by the agency.
Third, perhaps not dissimilar to the intent of the Community Re-
investment Act, the government must consider ways to engage and
incentivize the private sector in this work. At Accion Opportunity
Fund, for example, we work with companies like Federal Express
and Boston Brewing Company to advance online support and
coaching opportunities for entrepreneurs. Programs like these, or
government-initiated opportunities like the 2019 Pledge to the
American Worker, can also serve as a model of the convening
power of government to engage businesses of all sizes to advance
trainings, apprenticeships, and job placement all across the coun-
try.
Fourth, in coordination with existing resource partners, policy-
makers must encourage and incorporate new and innovative tech-
nical assistance stakeholders into this process. During my time at
SBA, for example, we pioneered a pilot program called the
Makerspace Hiring Training Collaboration and Hiring (MaTCH)
initiative, to advance the makerspace incubator system. This pilot
immediately impacted many businesses across the country in
places like California, Missouri, New Hampshire, New York, Okla-
homa, Pennsylvania and Puerto Rico.
Fifth, Congress should be a partner to the Executive Branch as
part of the trackable interagency cooperation process. Although
meetings like these are usually governed by executive order or
memoranda of understanding, on this topic a congressionally-en-
gaged, bipartisan working group for key offices such as SBA,
MBDA, the Department of Labor’s WIOA, various secondary edu-
cation offices within the Department of Education, could make
huge strides on this topic and avoid much of the bureaucratic dis-
ruption that can impact any administration.
Finally, I will close by saying that all of this is doable right now.
However, these would just be part of an overall strategy that could
be developed in accordance with a comprehensive study on these
issues. Now, I know that such studies are often frowned upon as
kicking the can down the road, but given the massive size of all
of these grants and appropriations in their entirety, such a review
could set forth a government-wide best practices approach that
could maximize measurable small business and workforce out-
comes, while ensuring the government is a responsible steward of
taxpayer dollars.
Thank you all again to all of you for your work in this area, and
I look forward to any questions.
Chairman WILLIAMS. I now recognize Mr. Reginald Hodges for
his 5-minute opening remarks.
7
STATEMENT OF REGINALD HODGES
Mr. HODGES. Good afternoon, Chairman Williams, Ranking
Member Velázquez, and distinguished Members of the House Com-
mittee on Small Business.
Thank you very much for inviting me to tell our story. I am truly
honored to be here today and to share our story of the Training
Center of Central Texas. We are both a minority and veteran-
owned business since 2017. The Training Center was honored to
have had Chairman Williams address our summer graduating class
of 2021. He was called away to Washington, D.C. for a vote on the
Infrastructure bill, but he recorded an address addressed to our
students, which was a memorable moment for our 49 graduates,
mostly military veterans, of the electrical, solar and medical techni-
cian programs.
I am Reginald Hodges, CEO and president of the Training Cen-
ter of Central Texas. I was approached by the congressional staff
to share our story of our growth and challenges of training our stu-
dents not only for careers but also for starting their own busi-
nesses.
The Training Center offers a cost-effective, career-focused, flexi-
ble education and prepares our students for in-demand jobs in the
solar, medical, and electrical industries. Having been recognized for
3 years straight as the number one trade school in our area, we
would not be here today without Brian Sunshine, a co-owner, and
the first person that every students meets when they walk through
that door. And also, our esteemed director, Jim Bondi, a retired
colonel and one of the most respected men in our Fort Cavazos
community.
I enlisted in the Navy in 1994 at the Navy Recruit Training
Command at Great Lakes. There is a building there, Building
1405, located right there at Boot Camp. And they had a mural of
the first African American naval officers in the Navy’s history.
They were commissioned there at Great Lakes. These 12 ensigns
and 1 warrant officer went on to serve with distinction in World
War II. They called themselves the Golden 13. As I looked up to
those 13 men on a mural, I knew I wanted to be a naval officer
and I dedicated my life to that goal. The first day I arrived at my
duty station in Jacksonville, Florida, I enrolled in classes for my
associate’s at the local community college where I attended school
full time at night. Full time.
After leaving the Navy in 1998, I was accepted to an officer pro-
gram at the University of North Florida. Upon graduation with my
bachelor’s degree in electrical engineering, I attended Navy OCS.
The day I was commission in 2001 is still the greatest honor I have
ever had and I proudly served our country for 11 years.
I am a person of integrity and believe in service in our commu-
nity and building the next generation of skills. I am reminded that
the students who we serve at the Training Center are anywhere
from 18 to 30 years old. They comprise 20 percent of the popu-
lation, yet they make up 100 percent of our future. We have a
strong need to equip our students with the most enduring critical
skills in health care, in the electrical trade, and solar technicians.
At our school, these skills often get used right where our stu-
dents are in school. Our students work at nursing homes, assisted
8

living homes, blood drives, and actually do the electrical wiring for
Habitats for Humanities all throughout our area. As a career
school I would hope that we can obtain from this hearing addi-
tional resources for trade schools to partner with local businesses,
school districts, and trade organizations because by working to-
gether we can actually help build a stronger workforce and support
economic growth in our communities.
Additionally, I hope that we can foster more programs that are
similar to the very successful Boots to Business program for
transitioning veterans but for civilians. More specifically, high
school seniors as approximately 40 percent of small business own-
ers do not have a college education. However, nearly all of them
have a high school education. I say let’s get the word out about the
great resources that the Small Business Administratino has be-
cause the resources are there but few are aware.
I would like to thank you very much for this opportunity to be
here. Thank you very much, Chairman Williams, Ranking
Membmer Velázquez, and you distinguished people here on the
House Committee of Small Businesses. It has been an honor. It is
an honor. That is it. Thank you.
Chairman WILLIAMS. I am sorry. We recognize Mr. Palmer for
his 5-minute opening remarks.
STATEMENT OF RICH PALMER
Mr. PALMER. Chairman Williams, Ranking Member Velázquez,
and distinguished Members of the Committee. Thank you for the
opportunity to testify before you today. My name is Rich Palmer,
and I am the managing director of Launchpad Venture Group and
I am here on behalf of the Angel Capital Association. I will call it
the ACA. I am happy to be here to discuss how Congress can im-
prove the federal government’s engagement with angel investing to
better facilitate the flow of capital to small businesses.
ACA is a professional society of accredited angel investors who
make up the world’s most prolific early stage investment class.
ACA represents more than 15,000 accredited angel investors and
250 angel groups, accredited platforms, and family offices who to-
gether deploy more than $950 million in early stage capital every
year, supporting more than 30,000 entreprenerial companies.
I have spent nearly 20 years focused on entrepenurship. At the
beginning of my career on Wall Street I eventually cofounded Grav-
ity, the leading company for social good using AI. I also serve as
an entrepreneur in residence at Babson College, having invested in
dozens of promising startups and speak regularly on entrepreneur-
ship.
In 2022, I became managing director of Launchpad Venture
Group, a nationally recognized angel network. Launchpad currently
has more than 185 active angel investors who provide human and
financial capital to help enrepenur build successful companies.
Each Launchpad Member is qualified as an accredited investor
under the definition of Rule 501 of the SEC regulatoions.
Each year, Launchpad invests $8 to $10 million both in new and
follow-on opportunities. As one of the most active angel networks
in the United States, Launchpad exemplifies the power of angel in-
vesting as a driver of entrepreneurship.
9

Angel investing supports small businesses in four distinct ways.
First, angel investors provide crucial funding to startups and
early stage companies that may have difficulty accessing tradi-
tional sources of capital.
Second, angel investors provide invaluable mentorship and guid-
ance to entrepreneurs as they often have a wealth of experience in
the industry or sector that they invest in.
Third, angel investor are willing to take on higher risks com-
pared to traditional investors like banks and financial insstitutions,
and thereby, enable early stage companiesi to pursue innovatvive
ideas that have the potential for substantial growth.
Lastly, angels lend credibility to a startup. When a reputable
angel investor conducts due diligence, sits on a board, and invests
in a company, it signals to other investors, customers, and stake-
holders that the business has potential and is worth considering.
The facts speak for themselves. A desert angel study found that
every angel investment dollar has a multiplier effect of 21X. For
example, the average initial investment from a Launchpad Member
is $25,000, which creates economic value worth more than half a
million dollars per investor.
The importance of angel investing is further augmented by the
reality that existing federal resources were oriented towards small
businesses, such as the Small Business Agency (SBA) failed to cap-
ture the entire innovation ecosystem.
The SBA is undoubtedly an important organization. However,
the SBA does not focus on the early stage innovative companies
that angel investors concentrate on. Rather, they focus on tradi-
tional, established small businesses such as local restaurants, flow-
er shops, and so on. Since the SBA does not capture the entire in-
novation ecosystem, SBA should begin to leverage local angel
groups and our know-how to get more capital to entrepreneurs. Im-
portantly, although more than 16 million Americans qualify as ac-
credited investors, only about 16,000 are active angels. SBA could
help narrow that disparity by developing programs that leverage
private investment capital in early stage companies. Such an initia-
tive would especially benefit entrepreneurs of color and women who
may not be able to leverage connections or family wealth for their
investment.
My colleagues and I are ready and willing to serve as a resource
of infomration and feedback as you pursue your legislative solu-
tions to make capital more readily available to our Natino’s entre-
preneurs.
Thank you again for this opportunity to share my experience
with you. I look forward to your questions.
Chairman WILLIAMS. Thank you.
And I now recognize Ms. Sonya Smith for her 5-minute opening
remarks.
STATEMENT OF SONYA SMITH
Ms. SMITH. Thank you, Chairman Williams, Ranking Member
Velázquez, and to the House Small Business Committee Members.
Again, I am Sonya Smith, and thank you for the introduction. I
am the state director for the New York Small Business Develop-
ment Center, and with my experience of over 15 years of various
10

roles within the SBDC, Small Business Development and Economic
Development, from my knowledge gained from the work and expe-
rience with the SBDC, I am understanding and learned of the im-
portance of building an ecosystem to provide solutions to commu-
nities, regions, states, and nationwide.
As stated, both public and private resources can be valuable as
entrepreneurs look to start or grow their business. We must ensure
that any taxpayer dollars going towards these efforts are being ef-
fectively used in a way that is not duplicative of private sector ini-
tiatives.
The Small Business Administration offers a variety of services to
help educate and counsel small businesses, including small busi-
ness development centers. With over 1,000 locations nationwide,
SBDCs provide valuable resources to small businesses across the
country. Through our partnership with SBA, SBDCs are hosted by
universities, colleges, state, economic development agencies, or pri-
vate entities, and our goal is to help launch and grow small busi-
nesses.
The State of New York is one of the 63 networks represented in
the nationwide program consisting of all the states and U.S. terri-
tories. In the state of New York there are 22 service centers cov-
ering all 62 counties. There is no one size solution for our organiza-
tion for the 33 million small businesses of the country. Each busi-
ness owner or entrepreneur has their own unique circumstances
that may need the support and assistance from several resources.
As one of the four resource partners of the SBA, SBDCs, SCORE,
and Women Business Centers and Veteran Business Outreach Cen-
ters, SBDCs are a nationally accredited program that provide one-
on-one, no cost, confidential advice to small business owners and
entrepreneurs, educational training, and research and business re-
sources. The SBDC program offers a broad reach of resources and
opportunities to create an impact on businesses at every stage of
their business lifecycle.
The SBDCs across the country deliver high-quality services and
programming by experienced experts at each center. By leveraging
the private-public resources and partnerships, our program services
over one million small businesses nationwide and has the oppor-
tunity to continue to serve more with the multiplier effect.
With each SBA core dollar, federal dollars, the SBDCs match
that program with state and institution funds. It is the SBA’s larg-
est matching grant funded program. This shows not only the finan-
cial support from the state, local, and host institutions, but also the
value added the SBDCs provide to stakeholders in their commu-
nities.
One of the key functsions of the SBDC is to be a trusted, collabo-
rator and connector. The SBDCs tie all these parts together in
terms of small business assistance across the country, and you will
see how we partner with entities at the state level, as well as the
local, city, and county development groups to provide consistent
support statwide.
The SBA congressional budget states that the Office of Entrepre-
neurial Development has made noteworthy progress. The SBDCs
have provided a large share of these achievements. Eighty-eight
percent of capital infusion, 75 percent of new business starts serv-
11

ing over a million clients, as well as supporting over 5 million jobs.
The success of the program is evident and the data shows that the
results increased during the panic and the demand has stayed up
as well as the results.
When small business owners and entrepreneurs need support,
one, they do not know where to go or where to start; two, there are
so many resources available that they are not sure which one
would be beneficial, too much information at once, and the SBDCs
have been known as the best kept secret, which is not a com-
pliment of the program with the inception year of 1979.
During the pandemic with the support of CARES Act funds, the
SBDCs were able to, for the first time, use SBA grant funds to de-
velop and pay for marketing and informational materials to expand
reach to communities. The reauthorization of the program would
help modernize the administrative concerns and streamline proc-
esses and provide allocation for marketing purposes.
SBDCs collaborate with resources and private organizations,
chambers of commerce, trade and industry groups, and associations
by providing technical assistance due to staffing capacity, training,
and educational programs. We are also co-located in these locations
for accessibility.
Thank you again for your time and your work with small
busienses and taxpyaers across the country and I look forward to
your questions.
Chairman WILLIAMS. Great.
We will now move to the Member questions under the 5-minute
rule which we talked about. So I recognize myself for 5 minutes.
Mr. Hodges, we have, as we said earlier, met several times pre-
viously. And before I get started, I want to thank you again for
your service to our country and the outreach you do to the veterans
around newly named Fort Cavazos. You know it’s better than most
but our servicemen and women are such great leaders and can do
amazing things in the private sector when they are given the right
training and the right opportunities. So, one of the most pressing
things we keep hearing when we speak with small businesses is
the ability to find qualified workers.
Mr. Hodges, my question, can you describe how the Training
Center of Central Texas is able to adapt to the needs of the small
business community? And how do you ensure that you are able to
continue providing value for your customers?
Mr. HODGES. Mr. Chairman, first of all, there is a shortage of
electricians right now. While you have the infrastructure bill, you
have the renewable energy that is going on across the country,
well, 70 percent of renewable energy jobs are actually going to be
performed by electricians. And right now we have a shortage of
60,000 electricians in the United States. As a matter of fact, the
average age of an electrician, licensed electrician is 57 years old.
So what our school decided to do was create a program that was
a short 6 month program that actually addresses need. We were
partnered with local contractors in the area where right now ap-
proximately of our students have actually went on to work at this
local contractor. And also, we have been partnering with KISD in
our area also to bring in newly graduated students to actually come
over to the Training Center. And the way this is actually working
12

is just yesterday—I am going to give you a brief example here. Just
yesterday we had two students, recent high school students, come
in to the Training Center. They signed up for our program, for our
electrician program, and they said they did not want to go to col-
lege. They wanted a job within the next 6 months. And when they
graduate, they are actually going to go and work for the local con-
tractor there in our area. And it is really a very beautiful thing
that we are doing there.
Chairman WILLIAMS. Mr. Pilkerton, you have a unique perspec-
tive on the topics we are discussing today since you served as the
acting administrator of the SBA and now are focusing on how the
private sector can get better engaged to help small business.
So, can you describe some of the work you did during the time
as acting administrator to coordinate public and private partner-
ships without needing to spend additional federal funds?
Mr. PILKERTON. Yes, sir. Thank you for the question.
So I think what I would say from my time at SBA is really, the
big sort of takeaway from this is meeting businesses where they
are and including the components of innovation. And let me give
you an example. So all the resource partners that we have talked
about here today provide an incxredibly valuable service to the
SBA. But I do think the SBA, in order to innovate and modernize
needs to think about how those resource partners and perhaps
other resource partners could engage as part of this sort of small
business ecosystem.
So one of the examples that we used was the Ascent platform
that I mentioned before. And that was championed by Adminis-
trator McMahon. And that was focused on women businessese. And
it was called Ascent because it was essentially a mountain process
where you would scale your business and the technology that sup-
ported it was created by SBA and labor but it allowed these small
businesses to scale to sort of where they were. So it is not just
starting your business but being able to get into that corporate
supply chain which is innovation.
The second thing I would say is we did a Makerspace program
which I referenced in my program. And that is really sort of the
future of local incubators. So when you talk about trying to meet
businesses where they are, Makerspaces are very critical because
they can provide not only resources but the kind of SBA informa-
tion to those businesses in a local fashion.
Chairman WILLIAMS. Also, Mr. Pilkerton, you mentioned in
your testimony the need to have consistent performance metrics in
SBA programs. Can you give us quickly some examples of pro-
grams at the agency that have unproven track records of success
but continue to receive taxpayer dollars?
Mr. PILKERTON. So as I mentioned in my testimony, I think
that this is a huge opportunity for both the agency and this Com-
mittee to work together to perform a study of these programs be-
cause quite honestly, there are programs that are incredibly
impactful and there are components of those programs that are
perhaps antiquated and not meeting where the actual business
owners are.
13

So as I mentioned in my testimony, I know we are sort of to-
wards the end, I would really encourage a study to be supported
by this Committee.
Chairman WILLIAMS. Thank you very much.
I now recognize the Ranking Member for 5 minutes of questions.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman.
Ms. Smith, as you mentioned and I mentionend in my opening
statement, there are 33 million small businesses nationwide and
SBA resource partners provide important counseling and training
more than 1 million entrepreneurs each year. What can this Com-
mittee do to help the SBDCs and the other resource partners reach
more small businesses?
Ms. SMITH. Thank you, Ranking Member, for the question.
So what is the main focus I think is the reauthorization of the
program to be able to assist there with not only the administrative
side and the proceses and streamlining, but also the ability to have
an allocation towards marketing and outreach. For the first time,
CARES Act funds were the only allowable grant funds that were
utilized for marketing and outreach.
Ms. VELÁZQUEZ. Thank you.
I understand that you formed, Ms. Smith, a partnership with
host universities in New York to address some of the pressing
workforce challenges facing small businesses in the state. How
have these efforts benefitted both workers and small businesses?
Ms. SMITH. Thank you.
The apprenticeship program is a partnership with SUNY/CUNY,
so the State University of New York, the City Univerties of New
York, and Department of Labor. The main focus is the SBDCs
being a main partner with the community colleges to provide an
apprenticeship program. This is also to develop client facing. So
webinars, as well as webinars for our advsiors on workforce devel-
opment. This is the focus on how a business will register as a site
for an apprenticeship, for on-the-job training. This will assist with
the Earn as You Learn. And on the other side of it, looking at the
availability of training at the community colleges at the colleges in
the area.
So if a business has some upskill training that they would like
to do, it is participating in that and getting funds that will help
utilize and push forward the upper mobility of their workforce.
Ms. VELÁZQUEZ. Mr. Pilkerton, increasing access to capital for
the underserved has been a top priority of mine. Given the breadth
of your experience with the underserved, can you share with this
Ccommittee what more can be done to penetrate these hard-to-
reach communities? And also, how important is counseling and
technical assistance for these entrepreneurs?
Mr. PILKERTON. So thank you for the question. I will take the
last part first.
So, at Accion Opportunity Fund, we have received feedback that
90 percent of our clients who utilize the technical assistance would
encourage others to do so. So it is clearly a huge impact.
But to your point as far as getting access to capital in under-
served communities, one of the reasons when I left the SBA that
I came to a CDFI was to ensure that CDFIs and MDIs have that
seat at the table with other financial institutions because the serv-
14

ices that they provide are critical, and the outreach that they have
to these communities of color, women, rural areas, and other
groups are really kind of that piece that is msising from the finan-
cial services system. So the more support that they get from the
private sector because they are really engaged really enhances that
opportunity.
Ms. VELÁZQUEZ. Thank you.
Mr. Palmer, despite representing over 50 percent of the popu-
lation, female founders garner only 2.1 percent of venture-backed
capital in 2022, and the numbers are not better for minority led
companies. In your experience, what is being done to increase di-
versity on both the investor and investment sides?
Mr. PALMER. Thank you for that question. The Launchpad Ven-
ture Group, which is the group I represent, I have specific statis-
tics. I will read them out because they are a lot better than the 2
percent number which it is unfortunate; right? So, about 13 percent
of our founders are minority by their own definition of that. Twen-
ty-six percent have an immigrant on the founding team. Thirty
percnet have at least one woman on the founding team. And about
53 percent of the comapneis that we see—that we fund, excuse
me—have a combination of those three.
One of the things that we are seeing in the industry is on the
investor side people, you know, I said 16 million people could be
angel investors but only 16,000 are. A lot of that feels like aware-
ness of this opportunity. You know, I talk about what I do on a
daily basis and they say, oh, you can do that? I can help entre-
preneurs? I can make a little money? I can do these kinds of
things; right? And I think a lot of times those opportunities were
done on the golf course or behind the scenes or any of that kind
of stuff.
And so now, because of that awareness especially at Launchpad,
we are actively looking to balance and get folks in that are female,
that are minority.
Chairman WILLIAMS. Your time is up.
Mr. PALMER. Oh, excuse me. I am sorry.
Chairman WILLIAMS. Okay, no problem.
Ms. VELÁZQUEZ. My time is up. I yield back.
Chairman WILLIAMS. All right, thank you.
Okay, I now recognize Mr. Luetkemeyer from the great state of
Missouri for 5 minutes.
Mr. LUETKEMEYER. Thank you, Mr. Chairman.
The program is notorious for wasting taxpayer dollars with dupli-
cative programs and unnecessary red tape. One of the most con-
cerning examples of this within the SBA is the Community Navi-
gator Pilot. Although the SBA already had a high performing pro-
gram to help small businesses with training and development
(SCORE), the Democrat led American Rescue Plan established the
Community Navigator program which duplicates much of what the
SCORE program provides.
Worse in 2022, it was reported that Community Navigators re-
ceived $120 million in funding and it only helped 422 small busi-
nesses, while SCORE successfully helped 4,000 small businesses
with $20 million, six times the money, one-sixth of the businesses.
15

According to SBA’s FY24 budget request they want to decrease
the SCORE program funding and increase the budget for the Com-
munity Navigator Program.
Mr. Pilkerton, from your experience do you think that is a good
deal?
Mr. PILKERTON. Well, thank you for the question. With respect
to the Community Navigator Program, my organization did not
apply or participate so I cannot speak to the metrics that you ref-
erence. But I can tell you this. The SCORE program is excellent.
When I was SBA administrator, I traveled the country and I will
tell you that I went to individual businesses where the SCORE
mentors knew as much about the business as the business owners
and they were just as excited about the successes of that business.
And every small business that I went to benefited tremendously by
the knowledge, the wisdom, and real experience that these folks
had had during very successful careers.
Mr. LUETKEMEYER. I come from the Lake of the Ozarks area
there in Missouri which is a retirement area and we have lots of
retired executives there. And so that area has a SCORE chapter.
At one time it was the top SCORE chapter in the whole United
States because of so many executives retiring there and willing to
share their expertise and knowledge so it is a really, really good
program, and I really want to highlight that.
Mr. Palmer, you were talking about developing a program for
angel investors to help leverage money with the SBA a minute ago.
Can you expand on that just a little bit?
Mr. PALMER. Sure. Thank you for the question.
So for angels, a lot of time what we are looking to do is try to
figure out what kind of risk we are underwriting; right? The goal
is to sort of help these companies grow, reach critical mass, but
also, you know, see what their natural exit is. And that typically
happens between let’s say 50 and a $200 million exit. We are not
talking about the unicorns, if you know that word. They are uni-
corns. They are rare for a reason. We are trying to get involved and
help these companies win; right? Which means we need to start
from—if that is the end point, we need to make sure that we are
not overly sort of taking our after-tax dollars and putting them into
companies and sort of ruining the economics for us and for the
founders.
So what we kind of see is for more capital intensive but very
worthwhile businesses. Let’s say robotics. Let’s say AI. Let’s say
chips where an angel does not have the pocket to do it or we do
not have the time to hold on to. That kind of stuff. Working with
the SBA specifically through like SBIR grants so that the entre-
preneur can hold on to more of their company through the nondele-
gated funding and then we take over at the commercialization
stage.
Mr. LUETKEMEYER. Quick question for you. With regards to,
you know, the title of the hearing is with regards to inflation prob-
lems here with the small businesses, have you seen inflation affect
the number of businesses interested in having angel financing or
increased it?
Mr. PALMER. That is a good question. We see——
Mr. LUETKEMEYER. I only ask good questions.
16

Mr. PALMER. No, it was a great question.
Mr. LUETKEMEYER. That is why I am on this Committee. We
ask good questions.
Mr. PALMER. Thank you.
Mr. LUETKEMEYER. We ask them of people that have got good
answers though, too.
Mr. PALMER. We see about 1,500 to 2,000 companies a year
that come through our doors. And some are ready for angel invest-
ment and some are not. A lot are looking for it. I think what people
are recognizing now is that it is a harder funding landscape and
some of the, hmm, I will use the word ‘‘shenanigans’’ less defined
of sort of the front headlines of VC and FTX and Theranos are kind
of making this a harder place for these small companies to navi-
gate. As the inflation affecting the companies that come to us what
might affect is our angels’ ability to actually deploy capital, espe-
cially if about 10 percent of their, you know, we say about 10 per-
cent of your net worth should go into this asset class, maybe no
more because of the risk. So if something else goes down you are
overly allocated in this asset class and it could affect your deploy-
ment.
Mr. LUETKEMEYER. Thank you. Thank you.
Mr. Hodges, thank you so much. I do not have time to ask a
question but I just want to thank you for being here today, for
what you do for a lot of individuals to get them into the workplace.
In today’s world, technicians are going to be very, very important
and you are helping them get in that position and fill a very impor-
tant need. Thank you so much.
With that, Mr. Chairman, I yield back.
Chairman WILLIAMS. Thank you. And I now recognize Mr.
Landsman from the great state of Ohio for 5 minutes.
Mr. LANDSMAN. No questions.
Chairman WILLIAMS. Mr. Landsman, no questions?
All right. We recognize Mr. McGarvey from the great state of
Kentucky for 5 minutes.
Mr. MCGARVEY. Thank you, Mr. Chairman. Appreciate it.
Thank everyone so much for being here today. We really appreciate
you being in front of the Committee. This is a Committee that does
work together to try and help small businesses succeed in all of our
communities. We know what an important force and part of the
backbone of our communities that small businesses are. So we
want to talk about how we can continue to support the next gen-
eration of those small businesses.
Small business development centers (SBDCs) offer counseling
and training to all sorts of small businesses by developing informa-
tional tools that will provide for foundational guidance to startups
and existing businesses alike.
So Ms. Smith, one of the things you mentioned is that there is
no ‘‘one size fits all’’ approach to this. There are 33 million small
businesses across the country. We cannot just have one approach
for all of them. But can you touch on how the SBDCs work to meet
entrepreneurs where they are and how this program provides as-
sistance to small business owners of all backgrounds?
Ms. SMITH. Yes. Thank you for the question.
17

We focus on meeting people where they are, entrepreneurs and
small business owners with our outreach within the community. Of
course, during the pandemic that was a different deployment meth-
od but we do work with a lot of chambers of commerce, nonprofit
organizations, as well as our host institutions of higher education.
The more we look at our stakeholders and our partners in our com-
munities is as I mentioned a connector and a collaborator, so we
meet our community members where they are. And that is also the
diversity of our clients. The Ranking Member spoke about the di-
versity of women and minorities of not understanding the resources
or not getting the same in sales and access to capital so that can
be, we call it in some of the centers, ‘‘Be on the street.’’ So walking
down to the community and the neighborhoods in downtown, vis-
iting the clients that we already served, but also checking in to cli-
ents to talk about our SBDC services. And as I mentioned, non-
profit organizations, but also churches, areas where you may not
think about small businesses, but there are entrepreneurs and
small businesses to reach.
Mr. MCGARVEY. Thank you. And we want these programs to be
successful.
Ms. SMITH. Yes.
Mr. MCGARVEY. You know, we can be critical of the administra-
tion. When it is time, we want to also offer praise when it is due
but we want these programs to work. We want these programs to
work for our small businesses so we are encouraging entrepreneurs
and small businesses to grow.
And I did notice that the administration added a new metric that
measures client satisfaction with the small business development
centers and the SCORE was 93 percent favorable, which when that
information comes back to us is certainly an accomplishment.
So with that score that we have gotten back, how do these
SBDCs and the other resource partners set themselves apart from
programs offered at the state and local level in the private sector?
Ms. SMITH. Thank you. We are an accredited program of eco-
nomic development and small business development. So what that
means is a peer-to-peer method of continuous improvement and ex-
cellence in service. And so that model is modeled after the
Baldridge standard. And so that is helpful for looking at our net-
works and the consistency but also reinventing our programs. So
that is the way that we look at the excellence of customer service
and our client needs are the most important. So how we collaborate
together, co-counsel, co-advise, but look at best practices across the
nation. So that is a big thing for us I think as state directors but
all partners, is meeting the client where, as you mentioned in the
first question, meeting them where they are but also what success
means for that client.
Mr. MCGARVEY. Thank you. I appreciate that. Because as I
said, we want these programs to work. We also want more small
businesses. We want people to have access to small business and
to entrepreneurship, particularly, traditionally, disadvantaged
groups. And so I appreciate the work there.
Mr. Hodges, just before my time expires I want to ask you a
question because I loved your statement that students who are be-
tween the ages of 18 to 30 comprise 20 percent of our population
18

but 100 percent of our future. I could not agree more with that
statement. And this Committee has discussed extensively the op-
portunities for students to build careers outside of the traditional
4-year college route, and I think it is important that we create
pathways to employment and business ownership for every kind of
student.
So what are some ways that we can help more small business
partners, more small businesses partner with career and technical
education programs capable of building their skilled work force,
something I hear that small businesses in my district, you know,
clamor for on a daily basis?
Mr. HODGES. Actually, I would have to say awareness. You
know, when I look at the Small Business Administration and ev-
erything that they are doing, you can go to the website from the
very beginning of your business all the way to closing it out. All
the information is there. But the problem is no one is getting to
that information.
I know I am going to run out of time here. But just say, for in-
stance, right after the pandemic we were getting a lot of emails
and marketing materials and stuff about the Disaster Relief Fund.
It was so helpful for our school. It really was. And we took advan-
tage of it. If that same amount of effort was given—I am not saying
it is not here, but if that same amount of effort was given about
the Small Business Administration and all the things we can do
here, it really——
Chairman WILLIAMS. Your time is up.
Mr. HODGES. It really would do a lot. Thank you.
Mr. MCGARVEY. Thank you. I yield back, Mr. Chairman.
Chairman WILLIAMS. Next, we recognize Mr. Meuser from the
great state of Pennsylvania for 5 minutes.
Mr. MEUSER. I appreciate that, Chairman. Thank you very
much. Thank you very much to our witnesses.
So I have got a number of questions. First off, I would like to ask
Mr. Pilkerton, yourself, and Ms. Smith, just related to cybersecu-
rity resources and access to information. That seems to be an ongo-
ing them here that we have got to talk about. But do you feel that
small business owners have the sufficient awareness of what to do
should they come under some sort of cyberattack, Mr. Pilkerton?
Mr. PILKERTON. Thank you for the question.
So, there is information on the SBA website about how you can
protect your business against cyber but to the point that was just
made, that information is on the website. It goes back to the idea
that not only do you need a process, a program, a risk protocol, but
how do you communicate that to the small business? So you have
to do it in an innovative way that is actually meeting the small
business where they are.
So to answer your question, you know, I could not give you a per-
centage of small businesses that are aware of the cyberthreat, but
I think it is incumbent upon the federal government and state gov-
ernments and local economic development groups to enhance that
and provide that information in an efficient way.
Mr. MEUSER. Okay. Ms. Smith, does the SBDC offer such infor-
mation and connections?
19

Ms. SMITH. Yes. Talking about the public and private partner-
ship, that is one. We already have one established and then devel-
oping a new one when it comes to micro enterprises. So right now
small to medium-sized businesses, we give them an intuitive plat-
form with partnership with an entity called Posture. On this plat-
form it is training on best practices and gaining access to vital re-
sources to help protect their data, devices, and security instability
for their operations.
On the other side from micro enterprises is really focusing not
only on cybersecurity but looking at disaster resiliency and succes-
sion planning. So most microenterprises do not understand cyberse-
curity or how to protect themselves so trying to be more proactive
than reactive.
Mr. MEUSER. Well, that sounds excellent.
So working with local chambers. I have got some excellent cham-
bers throughout my district. In fact, they are outstanding. Do you
find the SBA and your organizations work effectively with the
chambers?
I will ask you, Mr. Palmer.
Mr. PALMER. I have no experience with that. Sorry, but thank
you.
Mr. MEUSER. Is that right?
Okay. Mr. Pilkerton?
Mr. PILKERTON. I think they do work effectively. But I think
it would be much more effective because the chambers are the ones
that actually are working with those private sector companies and
have the ability. The U.S. Chamber has a number of programs
around this but I do agree that that could bring a lot more private
resources and also great workforce opportunities to what Mr.
Hodges was talking about.
Mr. MEUSER. County chambers for angel investors as well as
for training programs, I mean, you know, talk about know the cus-
tomer. I mean, they spend a lot of time together. They know them
extremely well.
Mr. Hodges, do you engage with the chambers?
Mr. HODGES. Yes, sir. We are very engaged with the chambers
in our area. And as a matter of fact, we are very community fo-
cused as a trade school. And one of the reasons why we became
number one in our area is because every month on our calendars
we always reach out and do something. And through those actions
we actually do a lot of business.
Mr. MEUSER. Let me ask you both this.
Actually, Mr. Palmer, not you because you don’t really work with
the chambers yet. You should change that though.
Mr. Hodges, does the SBA or do the local chambers provide you
better access for your business?
Mr. PALMER. Yes, sir. Whenever we need any type of services
for our business, one of the first people that we would actually con-
tact is our local chamber. Harker Heights Chamber of Commerce
as a matter of fact. And it helps us with accounting, finding serv-
ices for electrical work, and much, much more.
Let me ask all of you this question. So the Navigator program
was introduced in, I think it was the Inflation Reduction Act. And
it cost $130 million. And it served 422 new businesses or helped
20

start up 422 new businesses which works out to be about $300,000
per small business star tup. Now, they do also do servicing on
16,000 others but you can do the math there. That is like $8,000
per outreach. Do you think there is a better way of spending
money, particularly since it may be very duplicative to SBDC?
Comments?
Ms. SMITH. I mentioned some of what we do with our data and
the strength of the SBDC program. But Community Navigators,
those relationships were already longstanding before the Commu-
nity Navigators pilot. So some of those books and hubs we have al-
ready worked with.
Mr. MEUSER. Thank you. I am over my time. I appreciate it.
Mr. Chairman, I yield back.
Chairman WILLIAMS. Thank you.
I now recognize Mr. Thanedar from the great state of Michigan
for 5 minutes.
Mr. THANEDAR. Thank you, Chairman. And I want to thank all
of you for being here and for your testimony.
I am an immigrant. And after getting my education I, you know,
had the entrepreneurial bug and wanted to start my own business.
And it was a little struggle getting capital. But I was able to secure
a 504 from the Small Business Administration that helped me buy
my first building for my business which made a huge difference.
And then, you now, I got another fire for later. So it is hard to ac-
cess but if you pursue it sometime good things happen. My concern,
you know, I represent Detroit and its surrounding areas, Michi-
gan’s 13th District.
And Mr. Palmer, Ms. Smith, you know, focus on bringing entre-
preneurship. I feel like I achieved my American dream but a lot of
people in my district do not have access to it and have difficulty
having access to the American dream. And part of the reason why
I am not running my businesses and I sold them, I decided to enter
public service is because I wanted to help out others to achieve
their American dream.
Now, I see, Ms. Smith, you know, really, if you look at the per-
centage of Black-owned businesses, they are substantially lower
than our Latino businesses, for example. Substantially lower than
their White counterparts. We also see lower revenues for Black
businesses. Black and Brown businesses. A lower number of em-
ployees.
Mr. Palmer, in terms of capital, I see angel investment is much
lower in Black businesses, angel follow on investment is substnially
lower in Black businesses. And here I am trying to promote entre-
preneurship. And I see a lot. You know, I have a woman in my dis-
trict. She is an amazing baker. She bakes amazing things. She has
the technical knowledge. She has a desire to succeed but does not
have the business knowledge. And so how does, you know, we give
people who have the desire, the skills, technical skills. How do we
give them the business skills?
Mr. Palmer, I believe you have been to Babson. I was in Babson.
I took my son there for an interview at that college. Purely, being
an entrepreneur I was excited to see a college that is purely fo-
cused on entrepreneurship education. Unfortunately, my son did
not take my advice and chose an alternate school, which was a
21

good school, too. But, so in terms of angel investment, again, what
can be done to get angel investment in poor Black and Brown com-
munities? Where is the problem? Is it them being educated? Are
there any kind of hurdles that we can overcome to rectify that situ-
ation? I do not have a lot of time left but I want to let you and
Ms. Smith address some of these concerns if you can.
Mr. PALMER. Thank you. I will be as quick as I can.
So Babson College, the number one entrepreneurship school for
undergrad and grad for the past 25-30 years. Seventy percent of
the students are actually internaitnoal. And one of the things that
I do is also as an entrepreneur in residence, I am there teaching
them how to sort of even navigate which idea to go with, let alone
the process, let alone cofounders, let alone all this stuff that they
have not had experience for. So half of it is education and the other
half is access to the funding and not putting any barriers up.
So one of the things that we do at Launchpad is you do not need
to know somebody to come in. You can go in through our applica-
tion. Granted, we have 185 Members so they are in the community.
They are mentoring. They are part of the chamber of commerce. I
should have said that before; right? But they are out there meeting
these folks before they even are ready; right? And 70 percent of our
funding each year, historically for 20 years, actually goes into fol-
low-on investments. Because first you are investing in the dream.
And then you are investing in the results. So it is pretty clear the
ROI of that. But thank you for your question.
Ms. SMITH. You are out of time. Okay.
Mr. THANEDAR. Thank you. I yield back, Chair.
Chairman WILLIAMS. I now recognize Mr. Crane from Arizona,
the great state of Arizona for 5 minutes.
Mr. CRANE. Thank you, Mr. Chairman.
My first question is to Mr. Palmer. How does the government
interfere most with your ability to invest private capital into poten-
tial businesses?
Mr. PALMER. Most is a difficult thing so I will ramble for 4 sec-
onds; right?
So one is sort of the regulatory risks surrounding certain busi-
nesses; right? So I will speak for our industry. We are mostly fo-
cused in New England based companies and so a reflection of what
is going on there. You will see high tech, you will see life sciences.
You will see healthcare. And a lot of what we have to contend with
is if these companies need to go through regulatory hurdles, if
there are stages. If there is anything like that it impacts our risk,
like the risk we are underwriting, which will impact: (a) the
amount of funding we are willing to give, evaluation, any of these
kinds of things. Second, and I think I sort of mentioned it, we usu-
ally see angel investors invest maybe 10 percent of their net worth
in this asset class because of the risks associated with it. But that
is a relative amount. So if something happens to your other money
related to your house, related to stocks, related to wherever else it
is going, which I think the govnerment has an imapcat on, that will
affect whether we are willing or able to put monye toward. So I
think those are the two I would like to share. Thank you again.
Mr. CRANE. Next question also to Mr. Palmer. Wh at is the area
you are seeing govnerment fail small business the most in?
22

Mr. PALMER. Where I am seeing it most is—and this is more
anectdotal maybe. I do not have the data to surround this but a
lot of companies that could benefit from these SBIR grants that I
have been talking about are afraid to go through the process. They
are afraid of the paperwork. They think they need to know some-
body. They had an entrepreneur that did it and they heard about
it. But however it was perceived to them it is a barrier. And so
they go with the hard way. Or they bootstrap it to the point where
they have no more money left. And so what I am seeing there is
maybe it is education, maybe it is a streamline of this process, but
those two things are sort of getting in the way of companies. And
I think that might be a failure worth looking at.
Mr. CRANE. Follow-on question, Mr. Palmer. How efficient do
you think the U.S. government is including the SBA?
Mr. PALMER. I do not know if I can answer that question. Not
for any reason; I just do not have a good response for you.
Mr. CRANE. So you do not have an answer on whether you think
the U.S. Government is efficient or not?
Mr. PALMER. I know for Launchpad we get entrepenerurs in
and out of the process in 3 weeks or less and we judge them based
off of the returns. It is pretty simple the ROI of that. I am not sure
if I have heard ROIs for the other side.
Mr. CRANE. What about you, Mr. Hodges? What do you think?
Do you think the federal government tends to be very efficient or
not?
Mr. HODGES. In education it is a little bit different. Like, for
instance, with a trade school, our——
Mr. CRANE. Hold on real quick, Mr. Hodges. That is not the
question I asked you. I asked you, do you think the federal govern-
ment is efficient? Is run efficiently?
Mr. HODGES. Is it run efficiently? I realy cannot effectively say.
Mr. CRANE. Okay. Does anybody on the panel know how much
national debt we have here in the federal government?
Ma’am, I saw you smile at the end. Do you want to take a stab
at it? Any idea? Just anybody, give me a ballpark. Is it, would you
say $10 trillion plus, 20 trillion plus, 30 trillion plus?
Mr. HODGES. Thirty trillion.
Mr. CRANE. Yeah, you are right.
Does anybody know what it is going to be by January 2025 due
to the bill that we passed in the House or that we passed this last
week? Anybody know? About 36 trillion.
My point is is that there are some great people that come into
this Committee who actually, and I am an entrepreneur myself. I
love entrepreneurs. I love entrepreneurship. I have seen it lfit so
many people up, seen it help so many people in the community. My
point is to this panel and this Committee and it is going to con-
tinue to be is that the federal government should not be heavily in-
volved in it because it does a horrible job with the tax dolalrs. And
when all this money comes up and nobody knows where it went,
guess who gets fired? Nobody, ever.
Thank you for letting me bloviate and go long, Mr. Chairman. I
appreciate it.
Chairman WILLIAMS. I now recognize Mr. Pappas from New
Hampshire, the great state of New Hampshire for 5 minutes.
23

Mr. PAPPAS. Thank you very much, Mr. Chairman. I want to
thank our panel Members for their comments here today. I am
from New Hampshire where small business is big business. And
our main street economies drive our state and our regional econ-
omy.
Ms. Smith, I am glad that you are here. I have gotten to know
the work of our small business development centers, the way that
they work closely with other resource partners in the small busi-
ness space. And just to sort of be able to measure the impact that
they make, they have helped small businesses access more than
$44 million in new capital in New Hampshire, increase sales by
$17 million, and create and retain about 760 jobs just over the last
year. Overall, their economic impact was about $207 milllion in
New Hampshire’s economy. That role has expanded since the pan-
demic as they built new relationships and met new entrepreneurs
to be able to support.
Now, several folks have referenced the issue of duplcation which
I think is an important thing for us to focus on but I will address
a GAO study that was done about 10 years ago that focused on du-
plication, fragmentation, and overlap of various entrepreneurial de-
velopment programs. No duplication was specifically found by GAO
at that time. They did find overlap and fragmentation. Made rec-
ommendations for more collaboration within the variety of agencies
within SBA and their resource partners. All recommendations were
resolved, have not reappeared on their annual report on duplica-
tion, fragmentation, and overlap. So, I think that is something that
is important to reference. And what I see where I live in New
Hampshire is a great deal of collaboration among resource part-
ners. One bill I have introduced helps highlight that collaboration.
It is actually called the Collaborate Act, which builds upon the col-
laboration between our PTACs or procurement technical assistance
centers in New Hampshire SBDC. Brings to bear some common
sense ways that these federal agenceies can cooperate.
So I am wondering, Ms. Smith, that was a long sort of entre
there, but if you could discuss the role of SBDC as being sort of
a nexus of resource partners. And if you see any duplication out
there that we need to address or the ways that you think that
greater collaboration can be fostered between various agencies and
resource partners that do this work for our small busineses.
Ms. SMITH. Thank you for the question. And as you mentioned,
within your state, the more resources we had during the pandemic,
the more output and success that we had to support our small
businsses. So that is a way for the support to the SBDC program.
But as you said, the center of collaboration and a connector for
our community, we are the statewide program to help build that
federal, state, and local connection for collaboration, the ecosystem
for small business assistance and support. With that being said, a
lot of the assistance that we provide is why we are co-locatedd with
certain locatinos, whether it is a chamber of commerce. Of course,
our institutions of higher education, PTACs, now ATACs, accelera-
tors on the established business side. So that whole life cycle of a
business is where SBDCs are that really trusted partner to come
and provide the technical assistance but also connect the business
owner with the resourcers that they need.
24

Mr. PAPPAS. Well, thanks for that comment. Small businesses
are diverse in how they are established, in terms of how they pro-
cure capital, in terms of their day-to-day needs. And I think we
need to continue to appreciate that as we think about the constella-
tion of resource partners that are out there to support them.
And I will also editorialize here a little bit and say that I was
very disappointed to see in the president’s budget a cut proposed
to SBDCs, and I hope that Congress can work to maintain or in-
crease funding for the work that you all do which is a lifeline.
Maybe in the remaining time I have if I could ask Mr. Palmer
a question. Congress on a bipartisan basis has been focused on how
we rebuild the nation’s infrastructure, how we invest in our indus-
trial base, including in the semiconductor industry. We need to see
serious workforce development as part of that. But maybe you can
speak to how public dollars can be matched with private invest-
ment in the interplay between those pools of money.
Mr. PALMER. Sure. I think I have mentioned it, but thank you
for the question, a couple of times of underwriting the capital in-
tensity of certain opportunities; right? So for semiconductors, for
training these AI models that seem like magic, it takes a signifi-
cant amount of hardware, a significant amount of money, a signifi-
cant amount of energy to get to that magic moment. And so pairing
sort of that ability for a longer time horizon and potentially deeper
pockets with the stage at which commercialization can happen and
we can build, you know, the job creation opportunities, build com-
panies around it and all that, I think that is how it gets paired.
Mr. PAPPAS. Thanks for those thoughts.
I yield back my time.
Mr. CRANE. I now want to recognize Ms. Salazar from Florida
for 5 minutes.
Ms. SALAZAR. Thank you. And I represent the city of Miami
which is, according to a study conducted by the federal government
is one of the best places in America to start a small business be-
cause for immigrants and for the Hispanic community you have
your small shop or having your small business is living the Amer-
ican dream. So I want to thank all of you for coming and sharing
with us your experience.
And specifically to Mr. Palmer, you said here on your statement
that the SBA should begin to leverage local angel groups that are
present in every community. So could you be a little bit more spe-
cific as to which way we could help you leverage those local angel
groups through the SBA?
Mr. PALMER. Sure. So thank you for the question.
One of the things that we like to think about when we, you
know, I said 1,500 of 2,000 companies come and some of them are
prepared for venture scale funding, angel scale funding, and some
are not; right? And knowing the difference between those two could
be a way to say the small businesses that are the local shops that
really support that, whatever, maybe it is a craft, maybe it is a
service, but the scale sort of stops at a certain point versus the
angel and VC sort of very large scale. They are small businesses
to begin with and then they grow from there. And so knowing how
to kind of almost collaborate together to say you belong here and
you belong with me could be one of the best ways to do it. That
25

is joint. That is potentially going to local angel groups. We are
doing mentorships. So if you do mentorship——
Ms. SALAZAR. To see if I understand a little bit better. If you
had to write legislation that will rule over SBA, so what would that
legislation say in order to create what you are saying, to leverage
local angel groups? Because what you are saying here basically is
that there is a disparity; that the SBA could help narrow the dis-
parity by developing programs that leverage that private angel. So
what are the programs that we would have to create?
Mr. PALMER. Yeah. So in all honesty I do not know all the ex-
isting programs, and especially not basically that may be in your
area. But still, it is finding ways. I do not see any SBA folks at
my angel group meetings out in the community when I am watch-
ing pitch competitions which are open to the public; right? And so
knowing that we are not in the same place. I am not sure you need
to legislate it or mandate it but we are just not in the same place
and I think that is doing a disservice to companies——
Ms. SALAZAR. And if we were to be in the same place, what is
the benefit for the community? What would be the benefit for the
community?
Mr. PALMER. So of those 2,000 companies we see, we only in-
vest in 2 to 5 percent of them. Some just are not ready and some
will never be sort of venture scale. Knowing that they are not com-
ing with us and they can go with another opportunity, I think that
is where the benefit to the community is.
Ms. SALAZAR. You said that there are 16 million, there could
be 16 million angel investors and there are only 16,000, that is a
big disparity. What is the number one cause for that disparity?
Mr. PALMER. Awareness that you can be an angel investor and
how to do it, not, you know, like gambling or willy-nilly. Like actu-
ally——
Ms. SALAZAR. Okay.
Mr. PALMER.—finding the companies, working together, guiding
them. We sit on the boards of our companies. We are with them
for between 5 and 10 years. I tis one of those things that people
just do not understand how the process of angel investing sort of
works. And maybe they have not had exposure to it. But it is
awareness.
Ms. SALAZAR. And how could we help you or help the commu-
nity become aware of those 60 million potential angel investors. I
am trying to figure out which way we could help you.
Mr. PALMER. Yeah, thank you for that. I appreciate it.
Marketing. Understanding when someone goes to the SBA and
they are ventured scaled, like here is what angel investors are.
Talking to the people around you, constituents, any of that kind of
stuff. It is an awareness problem which is effectively a marketing
problem in my opinion.
Ms. SALAZAR. So you are suggesting for the SBA to become—
that is what I am trying to understand. Marketing, I did not think
we were in the business of marketing but then how could we be
within the rules?
Mr. PALMER. Without going too much farther out on a limb, I
am not actually sure.
26

Ms. SALAZAR. So what you are basically telling me is tat we
should be marketing to our constituents the fact that there are
angel investors. But then we are trying to figure out how to do
that.
I might flip that if I might. Please do. Maybe I am not under-
standing.
Mr. PALMER. Sure. So 16,000 angel investors are part of the
ACA, or excuse me, $15,000; right: We invest about $950 million
Imagine if there were two more zeros attached to that and what
that would do. I am not sure how to solve the problem but there
is something there to unlock.
Ms. SALAZAR. Okay. Got it. Thank you. I yield back.
Mr. CRANE. I now want to recognize Ms. Gluesenkamp Perez
from Washington for 5 minutes. I apologize if I said that wrong.
Ms. GLEUSENKAMP PEREZ. Four points. Thank you, Mr.
Chair.
Mr. Hodges, thank you for being here. I am glad that the Com-
mittee is highlighting the important work that you do in preparing
students for employment and career advancement in healthcare
and construction job trades, job market. But there is significant
pressure for young people to go to college and pursue a 4-year de-
gree. At the same time we know that so many small businesses are
impacted by ongoing shortages of skilled labor and training centers
like yours are important to make sure that businesses have the
skilled labor they need.
So my question, how do we confront the enormous pressure, soci-
etal pressure, family pressure on young people to go to college and
instead get more of them to see the opportunities in the trades?
How do we set up a pipeline for them to get into these jobs and
be successful?
And beyond that, how can we help more businesses partner with
career and technical education programs to utilize the critical skills
that students are learning at centers like yours?
Mr. HODGES. Thank you. Thank you for that question.
One of the things that we really need is a better partnership be-
tween high schools and the training schools like we actually have.
For instance, the one thing that sets the Training Center apart
from a lot of these universities is the fact that we can actually
train our students in 6 months for several ready jobs. And these
particular jobs are in in-demand fields. A lot of our students, they
simply do not want to go off to a university and wait 4 years to
actually make a decent living. And there are actually some great
paying careers out there in the electrical, in the trades. But the
challenging thing is right now in the high schools, there is really
no push to go into these particular trades. And so if we can get
some help bridging that gap that would be great.
Ms. GLUESENKAMP PEREZ. I would like to mention that ap-
prenticeship provides a really great opportunity for folks to get on-
the-job training while they learn and data shows that businesses
can get a really strong return on this. But in my experience, I own
an auto repair and machine shop with my husband and we looked
into having a 16-year-old kid come in an apprenticeship program
and we could not afford the liability insurance and very real con-
cerns about inviting the DOL into our business in that way. And
27

we decided we could not do it until we found a private nonprofit
that agreed to cover the cost of his liability insurance to have a 16-
year-old in the shop with us. He has been with us ever since. He
just bought his first house. These are pathways to a solid middle
class. But the hurdle for small businesses to access these programs
and to engage in apprenticeship programs on the capital side can
be really intense. I wonder if you could sort of speak to some of the
broader sort of challenges that businesses face and engaging in
these apprenticeship programs.
Mr. HODGES. As far as with the trades?
Ms. GLUESENKAMP PEREZ. Well, some of the challenges that
they are going to have immediately is just typical business, you
know, as far as an entrepreneurial education, entrepreneurial pro-
grams. But also just access to capital. One of the challenges that
you actually run into when you start a business is just keeping
your cost down. And if you can actually have an entrepreneurial
programs in high schools that can actually show them how to put
together business plans, how to put together all of the different
steps for operating a business, I think that that would be very ben-
eficial.
Mr. HODGES. Now, we actually are doing something very simi-
lar to this for the Boots to Business program on our bases here for
veterans. But I believe that is sorely lacking right now out in the
regular community for civilians.
Ms. GLEUSENKAMP PEREZ. Thank you so much to all of our
witnesses for their testimony today. Thank you for the work you
are doing.
Mr. Chair, I yield back. Thank you.
Mr. CRANE. In closing I would like to thank your witnesses for
their testimony and for appearing before us today.
Without objection, Members have 5 legislative days to submit ad-
ditional materials and written questions for the witnesses to the
Chair which will be forwarded to the witnesses. I ask the witnesses
to please respond promptly.
If there is no further business, without objection, the Committee
is adjourned.
[Whereupon, at 4:08 p.m., the committee was adjourned.]
28

APPENDIX

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Chris Pilkerton, Chief Legal Officer at Accion Opportunity Fund

Thank you Chairman Williams, Ranking Member Velazquez, and to all of the committee
members.

Over the last several years I have spent my career focusing on issues related to the small business
community- with particular attention to on underserved populations. I served as the General
Counsel of the U.S. Small Business Administration under Administrator Linda McMahon, as well
as the Acting Administrator of the agency from April 2019 into early 2020 when I then joined the
White House to advance the issues that included access to capital and workforce development. The
lessons of those efforts and an associated bipartisan plan going forward have been documented
more specifically in a book I have recently coauthored titled "Underserved."

Since leaving government, I have continued this work in various capacities. I serve as the Chief
Legal Officer for Accion Opportunity Fund, the leading nonprofit community development
financial institution focused on small business lending and technical assistance to underserved
borrowers all across the country. I have also co-founded and developed an initiative called the
Small Business Corps at Georgetown University Business School- a private sector led program to
offer underserved small businesses with specific goal-focused technical support provided by
fellows who are recent college and business school graduates. I have also worked closely with
people like the performing artist Ice Cube to identify opportunities for underserved small
businesses to scale and participate in the Fortune 500 corporate supply chain.

While access to capital to small businesses is critical, academic analyses have shown that technical
assistance and counseling can be the most meaningful component of a business' ability to perforn1,
develop, scale and hire. There are technical assistance resource partners that have traditionally
been an important part of the small business ecosystem organizations such as SBDCs, SCORE,
Women's Business Centers and Veterans Business Centers. As this committee is aware, certain
funds to support these organizations are appropriated and then distributed via SBA. I have worked
with all of these organizations and have seen their impact on the growth of individual small
businesses.

Given my experience in this arena, I would recommend this Committee consider the following
methods to advance small business technical assistance in the United States.

First, for any entity that receives technical assistance dollars from a government grant or
designated appropriation, there must be a common menu of meaningful performance metrics- both
before and after distribution of the funds. These metrics must be reasonable and realistic, but also
significant enough to hold grantees accountable to the provision of quality services.

Second, technology must be central to this process from start to finish. Not only should technology
be utilized to streamline the application process, but the actual technical assistance provided must
have a substantive online learning component- as is seen in the SBA's Ascent platform- which was
championed by Administrator McMahon and continues to be highlighted by the agency.
29

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Chris Pilkerton, Chief Legal Officer at Accion Opportunity Fund

Third, perhaps not dissimilar to the intent of the Community Reinvestment Act, the government
must consider ways to engage and incentivize the private sector in this work. At Accion
Opportunity Fund, for example, we work with companies like Federal Express and Boston
Brewing Company/Sam Adams to advance online support and coaching opportunities for
entrepreneurs. Programs like these, or government-initiated opportunities like the 2019 Pledge to
the American Worker, can also serve as a model of the convening power of government to engage
businesses of all sizes to advance trainings, apprenticeships and job placement all across the
country.

Fourth, in coordination with existing resource partners, policymakers must encourage and
incorporate new and innovative technical assistance stakeholders into this process. During my time
at SBA, for example, we pioneered a pilot program called the Makerspace Hiring Training
Collaboration and Hiring - or the MaTCH initiative - to advance the makerspace incubator system.
This pilot immediately impacted many businesses across the country in places like California,
Missouri, New Hampshire, New York, Oklahoma, Pennsylvania and Puerto Rico.

Fifth, Congress should be a partner to the Executive Branch as part of trackable interagency
cooperation. Although meetings like these are usually governed by executive order or memoranda
of understanding, on this topic a Congressionally engaged bipartisan working group for key offices
such as SBA, the Minority Business Development Agency, the Department of Labor's Office of
Workforce Innovation and Opportunity, and various secondary education offices within the
Department ofEducation, could make huge strides on this topic and avoid much of the bureaucratic
disruption that can impact any administration.

Finally, I will close by saying that all of these are doable right now- today. However, these would
just be part of an overall strategy that could be developed in accordance with a comprehensive
study on these issues. I know that such studies are often frowned upon as kicking the can down
the road, but given the massive size of all of these grants and appropriations in their entirety, such
a review could set forth a government-wide best practices approach that could maximize
measurable small business and workforce outcomes, while ensuring the government is a
responsible steward of these taxpayer dollars.

Thank you all again for your work in this area and I look forward to any questions.

2
30

Good afternoon Chairman Williams and thank you so much for inviting me to tell our story. I am
truly honored to be here today and to share our story of the Training Center of Central Texas
(formerly Training Center of Healthcare Careers). We are both a minority and veteran owned
small business since 2017. The Training Center was honored to have had Chairman Williams
address our summer graduating class of 2021. He was called away to Washington for a vote on
the Infrastructure bill, but recorded an address to our students, which was a memorable moment
for our 49 graduates (mostly military veterans) of the electrical, solar and medical technician
programs.

I am Reginald Hodges, CEO and President of the Training Center of Central Texas. I was
approached by congressional staff to share our story of growth and challenges of training our
students for not only careers but starting their own businesses.

I enlisted in the Navy in 1994 at the Navy Recruit Training Command Great Lakes. Building
1405, located onboard Recruit Training Command, had a mural of the first African-American
naval officers in U.S. history that were commissioned at Great Lakes. These Twelve ensigns
and one warrant officer, went on to serve with distinction in World War II. They called
themselves the Golden Thirteen. As I looked up to those 13 men on this mural I knew I wanted
to be a Naval officer and dedicated my life to that goal. The first day I arrived at my duty station
in Jacksonville, Fl I enrolled in classes for my associates of arts at the local community college,
where I attended school full time at night. After leaving the navy in 1998, I was accepted into an
officer program at the University of North Florida. Upon graduation with a B.S. in electrical
engineering I attended the Navy's Officer Candidates School. The day I was commissioned in
2001 is still the greatest Honor that I had. I proudly served our great Nation for 11 years.

I am a person of integrity and a believer in service to our community and building our next
generation with critical skills. I am often reminded that our students who are between the ages
of 18 to 30 comprise 20% of our population and 100% of our future. We have a strong need to
equip our students with the most enduring critical skills in Healthcare, Construction Electrician,
and Solar Electrician Technician fields. These skills often get to be used while our students are
in school at Nursing Homes, Assisted Living Homes, Blood Drives, Habitat for Humanity in
building homes and many more community opportunities.

At our recent graduation, we were recently reminded to "Dream Big and Inspire Others" and the
beautiful stories of our students both current and past are truly amazing! In every case, student
careers are jumpstarted many thanks to the skills learned at the Training Center. It is an
employment placement percentage (100%) that we always strive to achieve for all of our
graduating classes from all of our programs all of the time. In every case, student careers are
truly started at the Training Center with great success! From students starting their own
businesses and returning to hire our graduating students to instructors who have excelled in
being the very best examples for our students.
31

Over the past three years (2020 to 2022), our school has been voted
The Best College I University in Central Texas
The Best Trade School in Central Texas
The Best Training Center in Central Texas
And one of the Best Places to Work in Central Texas, by the Killeen Daily Herald's
readers' poll

With excellent student satisfaction, exemplary certification test results, great employment
outcomes, caring instructors, labs that are second to none, and a clean audit from the Texas
Workforce Commission. At the Training Center, we stand behind who we are and who we serve
• and the overwhelmingly positive student perceptions and outcomes speak for themselves. The
Training Center is a truly caring institution, we pride ourselves on being passionate about
bringing the keys of opportunity to our students' front door for them to unlock whenever we can.

Thank you so very much for this opportunity!
32

Testimony of Rich Palmer
Managing Director, Launchpad Venture Group
On behalf of Angel Capital Association

House Committee on Small Business
"Assisting Entrepreneurs: Examining Private and Public Resources Helping Small
Businesses."

June 13, 2023

Chainnan Williams, Ranking Member Velazquez, and distinguished members of the Committee,
thank you for the opportunity to testify before the Committee today. My name is Rich Palmer. I
am the Managing Director of Launchpad Venture Group, and I appear today on behalf of Angel
Capital Association (ACA). I am happy to be here to discuss how Congress can improve the
federal government's engagement with angel investing to better facilitate the flow of capital to
small businesses.

ACA is a professional society of member-accredited angel investors who make up the world's
most prolific early-stage investment class. ACA represents more than 15,000 accredited angel
investors and 250 angel groups, accredited platforms, and family offices. Together, ACA's
members deploy more than $950 million in early-stage capital every year, supporting more than
30,000 entrepreneurial companies in our investment portfolios.

I have spent nearly twenty years focused on entrepreneurship and marshalling resources to help
small businesses. After receiving a dual major Bachelor of Science in Information Technology
and Economics from Rensselaer Polytechnic Institute, 1 began my career on Wall Street, where I
led product development at Relationship Science. I was also head of portfolio analytics for S&P
CapitallQ's quantitative intelligence team.

I then co-founded and served as the CTO of Gravyty, the leading AI company for social good.
This position garnered me awards, patents, and accolades, including placement in the Boston
Business Journal's 40 Under 40 list and Babson College's Entrepreneurship Award. I continue to
serve as an Entrepreneur-in-Residence at Babson College, I have invested in dozens of promising
startups, and I advise and speak regularly on entrepreneurship.

In 2022, I became Managing Director of Launchpad Venture Group. A proud member of ACA,
Launchpad Venture Group is a leading, nationally recognized angel network. Launchpad pools
human capital for purposes of sourcing, conducting due diligence, and negotiating terms, but
Launchpad's members make their investment decisions individually, with each investor's name
on the capitalization table. Unlike groups structured as funds, Launchpad takes no management
fees, nor does it earn can-ied interest on profits.

Launchpad cun-ently has more than 185 active angel investors huilding individual portfolios by
providing human and financial capital to help entrepreneurs build successful companies. Each
Launchpad member is qualified as an accredited investor as defined under Rule 501 of the SEC
regulations. Since 2001, Launchpad members have invested over $125 million in more than 150
33

startups. Some ofLaunchpad's largest investments include stakes in Zipcar, EZCater, and Clean
Fiber. We are the most active angel network in New England and one of the top three most
active angel networks in the United States.

Each year, Launchpad invests $8 to $10 million in approximately 30 to 40 rounds of financing,
both in new opportunities and in supporting our growing portfolio of companies. Thus,
Launchpad exemplifies the power of angel investing as a driver of entrepreneurship.

Angel investing supports small businesses in four distinct ways.

First, angel investors provide crucial funding to startups and early-stage companies that may
have difficulty accessing traditional sources of capital. Angel investors bridge the gap between a
company's initial seed funding and subsequent rounds of venture capital or other forms of
financing. This early-stage funding is often vital for entrepreneurs to develop their ideas, build
prototypes, hire key personnel, and bring their products or services to market.

Second, angel investors provide invaluable mentorship and guidance to entrepreneurs. Angel
investors typically have a wealth of experience and expertise in the industry or sector they invest
in. Therefore, they are uniquely qualified to offer valuable mentorship, guidance, and strategic
advice to entrepreneurs. This support helps startups navigate challenges, make informed
decisions, and increase their chances of success. Moreover, angel investors often have extensive
networks which they can leverage to the benefit of small businesses they invest in.

Third, angel investors provide essential "risk capital" to startups. Angel investors are willing to
take on higher risks compared to traditional investors like banks or financial institutions. They
understand that startups and early-stage companies face significant uncertainties and may have a
higher failure rate. By providing risk capital, angel investors enable entrepreneurs to experiment,
iterate, and pursue innovative ideas that have the potential for substantial growth.

Fourth, angel investment can lend credibility to a startup. When a reputable angel investor
invests in a company, it signals to other investors, customers, and stakeholders that the business
has potential and is worth considering. Consequently, angel investment can increase an
entrepreneur's chances of attracting further investment from venture capitalists or other sources.

The facts speak for themselves. Desert Angels conducted a study that found every dollar invested
by an angel investor has a multiplier effect of 21. The average initial investment from
Launchpad, specifically, is $25,000, which creates economic value worth more than half a
million dollars per investor. Launchpad's members team up to put together rounds of between
$500,000 and a million for pre-seed funding, and up to $3 million for seed rounds.

Because the market knows that angel investors provide crucial due diligence, the angel
investment model delivers returns that are two times better than traditional investments, and
companies with an angel on their board of directors earn returns 2.5 times higher than companies
without.
34

The importance of angel investing is further augmented by the reality that existing federal
resources oriented toward small businesses, such as the Small Business Agency (SBA), fail to
capture the entire innovation ecosystem. The SBA is undoubtedly an important organization. The
SBA's importance was underscored during the COVID pandemic, when it was tasked with the
monumental endeavor of overseeing the Payment Protection Program (PPP) and the Economic
Injury Disaster Loan (EIDL) program. However, the SBA does not focus on the early-stage
innovative companies that angel investors concentrate on. Rather, the SBA focuses on
traditional, established small businesses such as local restaurants and flower shops. Therefore,
SBA funding fails to reach an entire segment of innovation in our economy.

The Small Business Innovation Research (SBIR) program, specifically, measures success based
on deployment of federal funds, not on a business's ultimate commercial viability. This is
misguided, and represents a failure to understand and capitalize on the innovation ecosystem.
SBIR encourages small businesses to engage in federal research and development (R&D) with
the potential for commercialization by providing funding opportunities for small businesses to
conduct R&D projects that align with the specific technology needs and priorities of
participating federal agencies. These agencies include the National Institutes of Health (NIH),
the National Science Foundation (NSF), and the Department of Defense (DoD). The narrow
focus of this program on these agencies' particular needs and priorities disregards the thousands
of innovative startups whose priorities arc not aligned with these agencies' - companies that
have high-growth, job-creating potential on a national or international scale.

In light of the failure of public resources to adequately capture the entire innovation ecosystem,
SBA should begin to leverage local angel groups and our know-how in order to get more capital
to entrepreneurs and small businesses. Angel investors are present in every community in the
United States. Importantly, although more than 16 million Americans qualify as accredited
investors, only about 16 thousand who are active angel investors. SBA could help narrow that
disparity by developing programs that leverage private individual capital to invest in early-stage
startups. By deepening its engagement with angel investors, SBA could play an important role in
harnessing more private capital for small businesses and innovative startups. Such an initiative
would especially benefit entrepreneurs of color, who cannot leverage family connections or
family wealth, and thus particularly depend on professional angel investment.

Moreover, angel investing will be essential to the fulfillment of Congress's and the President's
industrial policy goals. The CHIPS and Science Act of 2022, for example, seeks to reestablish
the semiconductor industry in the US by returning leading-edge chip manufacturing to the US,
expanding the US's capacity to make current chips and critical supplies, reinforcing the US's
strengths in chip design and equipment, and growing an American semiconductor workforce.
Though Congress has allocated important funding for this ambitious legislation, that funding
cannot reach the CHIPS Act's goals without support from more capital creation and innovation.
Angel investing is uniquely suited and ready to drive that innovation, bolster the American
economy, and support the US government.

My colleagues and I are ready and willing to serve as resources of information and feedback as
you pursue legislative solutions to making capital more readily available to our nation's
35

entrepreneurs. Thank you again for this opportunity to share my experience with you. I look
forward to your questions.
36

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Sonya Smith, State Director NY Small Business Development Center
(NYSBDC)

Thank you, Chairman Williams, Ranking Member Velazquez, and to all the House Small
Business Committee members.

My background: NYSBDC State Director, Sonya Smith. I was appointed state director in
December 2021 and rose through the SBDC ranks as the first woman and first African American
appointed to lead New York's vast SBDC network in its nearly 40-ycar history. I had previously
worked with The Pennsylvania SBDC program in various roles for over 10 years and a few years
working as the Associate Director of Grants and Sponsored Projects for Kutztown University in
Pennsylvania. From the knowledge gained from my work and experience with the SBDC, hut
also working as university staff with grant management, grant writing and program/pmtnership
development. I've learned how important it is to build an ecosystem to provide solutions to
communities, regions, state and/or nationwide. As stated, "both public and private resources can
be valuable as entrepreneurs look to stmt or grow their business. We must ensure that any
taxpayer dollars going towards these efforts are being effectively used in a way that is not
duplicative of private sector initiatives."

There is no "one-size fits aII" organization or solution for the 33 million small businesses across
the country. Each business owner or entrepreneur has their own unique circumstances that may
need the support and assistance from several resources. As one of the four resource partners of
the Small Business Administration (SBA), [SBDCs, SCORE, Women's Business Centers
(WBCs), Veteran Business Outreach Centers (VBOCs}]. SBDCs are a nationally accredited
program that provides one-on-one, no-cost, confidential advising to small business owners and
entrepreneurs, educational training, and research/business resources. The SBDC program offers a
broad reach, resources, and opportunities to create an impact on businesses at every stage of the
business life cycle.

The SBDCs across the country deliver high quality services and programming, provided by
experienced experts at each center. By leveraging the private/public resources and pmtnerships,
our program serves over l million small businesses nationwide and has the opportunity to
continue to serve more with the multiplier effect. With each SBA core grant (federal dollar), the
SBDCs match the program with state, local and host institutions funds, it is SBA's largest
matching grant-funded program. This shows not only the financial support from the state, local
and host institutions, but also the value-added the SBDCs provide to stakeholders in their
communities. One of the key functions of the SBDCs is being a trusted collaborator and
connector. The SBDCs tie all these parts together in terms of small business assistance, across
the country you will see how we partner with entities at the state level, various local city and
county development groups, all to provide consistent support statewide.

When small business owners and entrepreneurs need support, they 1) Do not know where to go
or start 2) There are so many resources available they are not sure which would be the most
beneficial; too much information all at once. The SBDCs have been known to he the "best kept
secret," which is not a compliment for a program with an inception year of 1979. During the
pandemic, with the support of CARES Act Funds, the SBDCs were able to (for the first time) use
SBA grant funds to develop and pay for marketing and informational materials to expand reach
1
37

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Sonya Smith, State Director NY Small Business Development Center
(NYSBDC)
to communities. The reauthorization of the program would help modernize the administrative
concerns, streamline processes, and provide an allocation of funds for marketing purposes.

SBDCs collaborate with the other resource partners (VBOC, SCORE, WBCs), private
organizations such as chambers of commerce, trade and industry groups and associations; by
providing additional technical assistance due to staffing capacity, training and educational
programs, industry/market research and being co-located for accessibility. Consolidating
information, sharing partner information, partner roundtables, and clear step by step process guides
for entrepreneurs and business owners, will help give these individuals seeking assistance enough
information in a concise format. Having defined roles and areas of expertise in an ecosystem built
to support small businesses is important, to continue to foster collaboration and reduce any
duplication in services. Our partners leverage our reach to improve their coverage and maximize
the effectiveness of their programs. We have also collaborated with two spokes of the Community
Navigator Pilot Program, located in New York State. The Long Island African American Chamber
of Commerce (focused on black business owners) and Universal Processing- US Pan Asian
American Chamber spoke (focused on Asian retail merchants), these relationships were already
established, but were strengthened to focus on the following 1) Funding Opportunities & Business
Development: Create a list of resources by expertise and coverage area. 2) Create an
educational program to bring learning activities to the neighborhoods ofunderserved communities.

The SBDC program focus and outputs vary geographically, but all across the country, we have
developed programs to respond to both the diversity in the communities we serve, the diverse
needs of our small business clients, and also the diversity within the SBDC workforce. It is
important in New York State that we have specialized staple programs for our underserved
communities (women, minorities, veterans, rural, disabled, and many more). The NYSBDC also
assists displaced and unemployed individuals with the Self-Employment Assistance Program
(SEAP). This program allows people who are out of work and meet certain requirements to start
their own business while collecting Unemployment Insurance benefits.

Business Fast Track Trainings

This intensive 20-hour virtual workshop will be taught over a 3-day period.
Collaboration between NYSBDC regional centers and local private sector professionals

Topics will include:

Business Plan Development
Legalities
Hiring Employees
Financial Management
Business Financing Options
2
38

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Sonya Smith, State Director NY Small Business Development Center
(NYSBDC)
Marketing
Social Media
This workshop will be facilitated by a certified New York State Small Business Development
Center (NYS SBDC) Business Advisor and includes a variety of presenters who are all experts_in
different facets of small business start-up (view the presenters list here).

The Fast Track workshop also meets the requirements of SEAP (Self Employment Assistance
Program) through the Department of Labor.

Youth Entrepreneurship:
SBDCs located in New York part1c1pate in SUNY regional and statewide business pitch
competitions. This includes advising and prepping student teams, reviewing and assisting with
business plau development, pitch competition logistics, co-marketing, and/or panel judge. We
also have student workers. Students and graduates can also look at the possibility of working
internally with an SBDC. I am a product of once being a student worker at an SBDC and
learning the ins and outs of the program.

Apprenticeship Program SUNY/DOL:
NYSBDC partners with community colleges to produce SUNY Apprenticeship Program, to
develop client-facing and advisor-facing workforce development presentations. MVCC SBDC
hosts roundtable events that will bring together representatives from the SUNY Apprenticeship
Program, Working Solutions, Mohawk Valley Community College (MVCC), Career Services,
and The Center (Utica's refugee center). These events will provide small businesses with a range
of solutions to the workforce issues they're experiencing. The Center is a new partner and has
had great success placing refugees in jobs with local businesses, with the benefits of much higher
retention rates and better job performance than non-refugees.

Educational Opportunity Centers (EOC) & Boards of Cooperative Educational Services
(BOCES) Entrepreneurship Training:
EOCs aud BOCES elevate the potential of New York's underserved by providing a state-wide
system of quality, tuition-free academic and workforce development programs that impart skills,
enhance college, and job prospects, and improve lives and communities. NYSBDC collaborates
with the EOCs to provide entrepreneurship training parallel to the career center and faculty job
placement for graduates (culinary, cosmetology, welding and other trades).

NY State Center for Disability Entrepreneurship:
Funding/Resource partner- Developmental Disability Planning Council
This program embodies our dedication to empowering people with disabilities to pursue their
entrepreneurial dreams. Through a comprehensive offering of training, coaching, mentorship,
networking opportunities, and funding access, we are determined to break down barriers and
foster a more inclusive, diverse, and th1iving entrepreneurial ecosystem.

NY Statewide program was developed to assist people with disabilities in starting a business. A
series of five workshops will be developed and presented Statewide to introduce
entrepreneurship to persons with disabilities. Prospective business owners from the disability
3
39

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Sonya Smith, State Director NY Small Business Development Center
(NYSBDC)
community will be exposed to resources and education to fully understand processes,
requirements, and referrals to build a successful foundation of their business idea. The following
workshops will be delivered by SBDC staff virtually or be offered in person to ensure all
interested entrepreneurs have access to this program. This series will be presented three times
per program period and outreach and collaboration will be in concert with local and Statewide
agencies that work with people with disabilities.

Childcare Support Initiative:
Collaboration- HHS, SBA and NYSBDC
Recognizing the crucial role that childcare plays in New York State's well-being, the
Farmingdale SBDC has developed a targeted workshop series as a testament to our commitment
to support childcare business owners. With over 163 businesses having participated in these
workshops, we have helped childcare businesses adapt to the changing business landscape and
ensure sustainable success throughout the state.

Syracuse Refugee Family Childcare Microenterprise Program
Grant-funded program for Afghan refugees to start much needed daycare centers.
Local provider supplying daycare training & technical assistance.
Onondaga SBDC providing small business startup training & technical assistance.
70 hours of training + technical assistance over 20 weeks.

Cybersecurity Program:
Our partnership with cyber-risk management firm Posture demonstrates our unwavering
commitment to safeguarding small-to medium-sized businesses from cyber risks. Through a
comprehensive 30-day program, businesses receive access to an intuitive platform, training on
best practices, and gain access to vital resources to protect their data and devices, ensuring the
security and stability of their operations.

The Pace University SBDC and CPAs from the New York State Society of CPAs will be
partnering to offer a CPA Accounting Clinic for New York State small businesses. Through this
effort coordinated by the Pace SBDC, participating CPA volunteers will meet one-to-one with
NYSBDC small business clients statewide to review specific accounting questions related to
their small business. These virtual sessions will address questions in areas such as tax payment
and filing responsibilities and provide much-needed industry expertise to complement the free
one-to-one counseling serviees offered by NYSBDC Business Advisors.

MWBE Certification Assistance:
Championing diversity and inclusion is a fundamental aspect of our programming. Our
dedication to assisting businesses with MWBE certification has helped 920 businesses across
New York State obtain their MWBE Certification, promoting equal opportunities and inclusive
growth in loeal, state, and federal contracts.

SEED Program:
The SEED Program is a character-based loan fund developed in a partnership between
Broadview Federal Credit Union and the University at Albany's Small Business Development
4
40

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Sonya Smith, State Director NY Small Business Development Center
(NYSBDC)
Center, School of Business and School of Social Welfare. The program provides character-based
loans up to $35,000 for start-up and expanding businesses in the Capital Region and Western
NY. The SEED Program was developed to provide future and current entrepreneurs with capital
to start/expand their business. Selection for participation in the program and loan awards is
based on the overall business concept and the character of the applicant. The program provides
participants with the necessary business model development and business skill development to
be successful with their business and are supported by a Business Advisor from the Small
Business Development Center, a professor and MBA intern consultants from the University at
Albany's School of Business.

FEED Program:
This 6-week soup-to-nuts educational program is aimed at food entrepreneurs interested in
starting or expanding a food products business. Partnership between UAlbany SBDC and Cornell
Extension, professionals from the Cornell University AgriTech program will be on hand to talk
about the integral aspects of creating and packaging food items for consumers.

The Offshore Wind Training Institute (OWTI):
Faimingdale College and Stony Brook University lead the Offshore Wind Training Institute
(OWTI), which seeks to provide grants to entities within or affiliated with the State University of
New York (SUNY) system that will accelerate the development of an offshore wind workforce for
the New York offshore wind industry. Doing so will directly support the State of New York in
developing a diverse and highly qualified local workforce capable of constructing, manufacturing,
installing, operating, and maintaining offshore wind farms, in addition to performing electrical grid
integration, storage, and other onshore projects. Both SBDCs at these academic institutions
participate in workforce development training.

Empire State Development 2023 Global NY Export Promotion Tour:
NYSBDCs partner to assist with outreach and technical assistance for small businesses looking into
international trade as an opportunity to expand reach and increase sales revenue. Whether your
company is export-ready, or you're interested in entering the global marketplace, the Global NY
Export Promotion Tour offers an excellent opportunity for your business to explore new markets
around the world.

At each stop, you'll hear from our global trade representatives based in Canada, Mexico, Europe
(U.K.), South Africa, Israel, India, China and the Caribbean. Our international business experts and
industry specialists will also be on hand to share details about Global NY programs and
opportunities-from loans, grants and operational assistance to trade missions and trade shows-
that connect New York State businesses to the world. From one-on-one consultations to tips on
finding qualified sales representatives and distributors, you'll gain foreign market intelligence and
insight.

The Research Network at the New York Small Business Development Center (NYSBDC)
NYSBDC has built a unique and robust network of information and data that plays a driving
5
41

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Sonya Smith, State Director NY Small Business Development Center
(NYSBDC)
force behind the organization's success. The NYSBDC's success can, in part, be attributed to a
circular cycle that seamlessly integrates research, data, and client service, continuously refining
and enhancing our understanding of the small business landscape. This process begins with
meticulous research, drawing on a variety of sources and methods to identify trends,
opportunities, and challenges faced by small businesses. The findings are then translated into
action by the client This info11ns the development of tailored strategies, programs, and services
for our clients. By closing the loop between research, data, and client service, the NYSBDC
fosters an environment of continuous learning and innovation. This adaptive approach ensures
that our organization remains agile and responsive to the ever-changing needs of New York's
small businesses.

Online learning:
In 2022, the NYSBDC served over 17,500 individuals through a series of over 500 webinars and
workshops addressing various topics for entrepreneurs including topics like grant access,
business plan writing, and taxes. These webinars additionally have supported internal staff in
maintaining their professional development and certification goals, ensuring they possess the
necessary skills to serve clients effectively and passionately.

Small Business Academy:
In collaboration with Jamestown Community College, the SBDC Online Business Academy
offers a range of webinars and certifications to equip entrepreneurs with the skills they need to
succeed. Our courses cover entrepreneurship, intellectual property, website development,
ecommerce, social media marketing, and more.

EntreSkills:
NYSBDC's EntreSkills, a powerful resource fueled by our passion for knowledge and equal
access, offers 17 comprehensive modules on a variety of small business topics, including a new
module in 2022 focused on MWBE certification. EntreSkills is available at no cost to all
NYSBDC clients and is also utilized in high school and college classrooms across the state.

Internal (NYSBDC) professional development:
We also created a professional development system to ensure advisors broaden their skillsets and
deepen their expertise, consistently delivering exceptional client service.

The SBDCs across the nation have a proven track record of the program success and ROI for the
federal ($ l 40Mil), state, local and private dollars invested into it:

6
42

House Small Business Committee Hearing- "Assisting Entrepreneurs: Examining Private
and Public Resources Helping Small Businesses," June 13, 2023

Testimony of Sonya Smith, State Director NY Small Business Development Center
(NYSBDC)

Services and Impact for all cHents in CY 2022

l\v<i••w· ~ion
S,129 40l!-0_
59 107,773 23,401 14,191

60 $3,740,412 $568,754,790 $131,574,057 $97,955,514
60 13 1,9211 276 210
50 $361,000 $509,429,815 $73,377,952 $57,543,577

$835 717,'W) 24 $1445 $261,955 637 $33 428,693 7,105,400
74,126 60 2B 3,129 1,235 100!!

Exhibit l (Nationwide Stats)

111,u,tJ\He

500+ 76 17,500+ ■I &iEH
WEBINARS ONLINE TOTAL ATTENDEES u!4g 1
:\t1i-..1u,,
&WORKSHOPS COURSES (EDUCATIONAL
PROGRAMMING) 1...1 . . . W,l&Jf~I""'°"' lllllllflt»9,MU1t

..,.1-bu1-,.,•n••N•,t"'••......-,t•
Wlil w,.111,11t,(f h•o~ld ...C ~ l,aj tN
,.,1-.:•t1""9ltf<:1111•1-~n~•rd•o•ld
"
I -•hd w,th 0-,,1 ,.._~9•'°'11 trd ~-,I
·••1t,111l•l1IM>l•1t,c 't'eue.-'11tllt1"•
•t~u,:,r,,it•1bo1,t_.,,ldo,J1•~d1•
.-,11,~tQ,Otbo,.lbl)'Cl.... tl""IP..,
"'IOl\l,..lynol1'11.. t.tn•C11"0r;, ......,.
1\1..tc,.,1••cJtNw.11t•c"'-r,••1to •"-'-11'•t•>lapproc•l<1-•,...""'r
"'t1•'<1-ll1l-d\!1tQ~<ICOl'"ll\..... t,~N H'¥,U•"'1ry..:~

~~;:;1-.L1~l ~:~~7::::, ,;,:~:~:'"' -~
iori.:1< .....,.....,....,.1'<11..:etu.1 •Bradipo,ISSD<:CIJMt
, .... 1 ,,.,,~ "•' ....u;, ...
• Hld•Hvdson SBDC Cf'wnt

[ lc,<:••.i•i,,o,_,.,.; U,01 lc,•,•fol"'l.,.;,l l,lll

'": '"'.'.'~:
Sl'$,1Jl,8U
--- ...-·--·-~-
----·-----····,~---·--·--•-''•-
,...
•
~"" '(&'h
SSS.O•U,Hl
1111111
L~~~•!~.! ''U,U0,150
"'"'

i_ ~'~~-..?!"
I IIL~";;;i::;;;

•
0CJO&R\:Rli'1•illNl"1$UIIO,:RllZ

Exhibit 2 (NYSBDC Stats)

Thank you all again for your work for small businesses and taxpayers across the country. I look
forward to any questions you may have.
7
43

~
3138 10th Street North

NAFCU nafcu@nafcu.org I nafcu.org
National Association of Federally-Insured Credit Unions

June 12, 2023

The Honorable Roger Williams The Honorable Nydia Velazquez
Chairman Ranking Member
Committee on Small Business Committee on Small Business
U.S. House of Representatives U.S. House of Representatives
Washington, DC 20515 Washington, DC 20515

Re: Tomorrow's Hearing: "Assisting Entrepreneurs: Examining Private and Public Resources
Helping Small Businesses"

Dear Chairman Williams and Ranking Member Velazquez:

l write today on behalf of the National Association of Federally-Insured Credit Unions (NAFCU) in
conjunction with tomorrow's hearing, ll Assisting Entrepreneurs: Examining Private and Public
Resources Helping Small Businesses." NAFCU advocates for all federally-insured not-for-profit
credit unions that, in turn, serve 135 million consumers with personal and small business financial
service products. NAFCU appreciates the Committee's ongoing commitment to help increase
access to capital for entrepreneurs and strengthen the American economy.

Credit unions have evolved as small business lenders over the past two decades, and NAFCU and
our credit union members share the Committee's goal of empowering entrepreneurs and
strengthening small businesses in America. Over the past five years, 57 percent of business loans
made by credit unions were under $150,000, compared to 46 percent of loans under $150,000
for other lenders. NAFCU recognizes the need for smaller loans for small businesses, and that is
why we have supported legislation such as the Member Business Loan Expansion Act, from the
117th Congress, which would make it easier for credit unions to offer smaller business loans under
$100,000 by ensuring these loans do not count toward the arbitrary credit union member
business lending (MBL) cap. We believe bipartisan approaches such as this legislation provide
small businesses with an additional alternative to get the support they need in a timely manner.

By raising the definition of an MBL to exclude net aggregate loans less than $100,000, we would
quickly see increased loan availability, reduced burdens on borrowers, and it would make it easier
for federal credit unions (FCUs) to make these loans. This would benefit the communities credit
unions serve as well as the U.S. economy as a whole. It would also help to meet an unmet need.
Studies have shown that the majority of FCU member business lending is new lending that would
not have occurred otherwise.

In particular, credit unions are an important resource for our nation's veterans in their small
business and entrepreneurial endeavors. Service members develop broad expertise across many

NAFCU I Your Direct Connection 10 Federai Advocacy, Education & Compliance
44

The Honorable Roger Williams
The Honorable Nydia Velazquez
June 12, 2023
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disciplines while in the military, learning skills that can provide tremendous value to the
economy. After great personal sacrifice, these Americans deserve every opportunity for success
in their transition back to civilian life. One way Congress can help is to support legislation that
would provide relief to barriers that stand in the way of veterans accessing credit for small
businesses. NAFCU supports the Veterans Member Business Loan Act, introduced in the Senate
by Sens. Dan Sullivan and Mazie Hirono as S. S39, which would exempt loans made to veterans
from the MBL cap. NAFCU has encouraged the Senate to act on this bill and would also encourage
the House Small Business Committee to support an introduction in the House.

We thank you for the opportunity to share our thoughts on the importance of improving access
to capital for entrepreneurs and strengthen the American economy. Should you have any
questions or require any additional information, please contact me or Amber Mllenkevich,
NAFCU's Senior Associate Director of legislative Affairs, at amilenkevich@nafcu.org.

Sincerely,

Brad Thaler
Vice President of Legislative Affairs

cc: Members of the House Small Business Committee

NAFCU I Your Direct Connection to Federal Advocacy, Education & Compiiance

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