Women Entrepreneurs: An Economic Growth Engine for America (Senate Small Business Committee hearing, October 27, 2021)
Summary
Printed record of the Senate Committee on Small Business and Entrepreneurship hearing of October 27, 2021, Women Entrepreneurs: An Economic Growth Engine for America, S. Hrg. 117–240, published in 2022. Chairman Benjamin L. Cardin presided, the Committee meeting at 2:48 p.m. via WebEx and in Room 301 of the Russell Senate Office Building, with Ranking Member Rand Paul and Senators Cantwell, Duckworth, Rosen, Hickenlooper, Ernst and Hawley present. The witnesses were Dr. Tammira Lucas, CEO of The Cube Cowork in Baltimore, and Candace Waterman, president and CEO of Women Impacting Public Policy. The appendix prints their statements, their responses to questions from Senators Coons, Hirono, Rosen and Inhofe, and a statement from Engine dated November 3, 2021.
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“Women Entrepreneurs: An Economic Growth Engine for America (Senate Small Business Committee hearing, October 27, 2021).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/women-entrepreneurs-an-economic-growth-engine-for-america-senate-small-e9dfeb57a2/
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S. HRG. 117–240
WOMEN ENTREPRENEURS:
AN ECONOMIC GROWTH ENGINE FOR AMERICA
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
OF THE
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
OCTOBER 27, 2021
Printed for the Committee on Small Business and Entrepreneurship
(
Available via the World Wide Web: http://www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
47–359 PDF WASHINGTON : 2022
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED SEVENTEENTH CONGRESS
BENJAMIN L. CARDIN, Maryland, Chairman
RAND PAUL, Kentucky, Ranking Member
MARIA CANTWELL, Washington MARCO RUBIO, Florida
JEANNE SHAHEEN, New Hampshire JAMES E. RISCH, Idaho
EDWARD J. MARKEY, Massachusetts TIM SCOTT, South Carolina
CORY A. BOOKER, New Jersey JONI ERNST, Iowa
CHRISTOPHER A. COONS, Delaware JAMES M. INHOFE, Oklahoma
MAZIE HIRONO, Hawaii TODD YOUNG, Indiana
TAMMY DUCKWORTH, Illinois JOHN KENNEDY, Louisiana
JACKY ROSEN, Nevada JOSH HAWLEY, Missouri
JOHN HICKENLOOPER, Colorado ROGER MARSHALL, Kansas
SEAN MOORE, Democratic Staff Director
WILLIAM HENDERSON, Republican Staff Director
(II)
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C O N T E N T S
OPENING STATEMENTS
Page
Cardin, Hon. Benjamin L., Chairman, a U.S. Senator from Maryland .............. 1
Paul, Hon. Rand, Ranking Member, a U.S. Senator from Kentucky .................. 3
WITNESSES
Lucas, Dr. Tammira, CEO, The Cube Cowork, Baltimore, MD ........................... 5
Waterman, Ms. Candace, President and CEO, Women Impacting Public Pol-
icy, Washington, DC ............................................................................................ 11
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Cardin, Hon. Benjamin L.
Opening statement ........................................................................................... 1
Engine
Statement dated November 3, 2021 ................................................................ 26
Lucas, Dr. Tammira
Testimony .......................................................................................................... 5
Prepared statement .......................................................................................... 8
Responses to questions submitted by Senators Coons, Hirono, and Rosen . 30
Paul, Hon. Rand
Opening statement ........................................................................................... 3
Waterman, Ms. Candace
Testimony .......................................................................................................... 11
Prepared statement .......................................................................................... 14
Responses to questions submitted by Senators Coons, Hirono, Rosen,
and Inhofe ...................................................................................................... 34
(III)
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WOMEN ENTREPRENEURS:
AN ECONOMIC GROWTH ENGINE
FOR AMERICA
WEDNESDAY, OCTOBER 27, 2021
UNITED STATES SENATE,
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP,
Washington, DC.
The Committee met, pursuant to notice, at 2:48 p.m., via WebEx
and in Room 301, Russell Senate Office Building, Hon.
Benjamin L. Cardin, Chairman of the Committee, presiding.
Present: Senators Cardin, Cantwell, Duckworth, Rosen,
Hickenlooper, Paul, Ernst, and Hawley.
OPENING STATEMENT OF HON. BENJAMIN L. CARDIN,
CHAIRMAN, A U.S. SENATOR FROM MARYLAND
Chairman CARDIN. The Senate Small Business and Entrepre-
neurship Committee will come to order. It is good to have Senator
Ernst with us. We have adjusted the schedule because of the roll-
ing votes. We have just started two votes on the floor of the Senate,
so I think members might be tending to their vote.
Senator Paul, I understand, was here. He just left in order to
cast that vote and then he will be coming back, and when he ar-
rives we will allow him to give his opening statement.
At this point I want to just welcome our two witnesses and thank
you all for joining us today for this important hearing on how the
Federal Government can empower women entrepreneurs and un-
leash the potential of women-owned small businesses so they can
continue to be a growth engine for our economy as we recover from
COVID–19 pandemic.
This hearing comes as we close National Women’s Small Busi-
ness Month, during which we recognized the contributions of
women entrepreneurs to our local and national economies. I look
forward to National Women’s Small Business Month each year be-
cause women entrepreneurs should be celebrated, for prospering in
spirit of the historical barriers to success that persist.
National Women’s Small Business Month is particularly impor-
tant in my home state of Maryland, as it boasts the highest con-
centration of women-owned small businesses in the country—we
are very proud of which—many of which are owned by minority
women. It is a distinction that fills me with great pride and in-
forms my work as Chair of this Committee.
(1)
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Today’s hearing also falls two days after the 33rd anniversary of
the Women’s Business Ownership Act being signed into law. This
landmark bill eliminated state laws that prevented women from se-
curing a business loan without a male co-signer, and it established
the Women’s Business Center Program at the Small Business Ad-
ministration.
We are now far removed from these antiquated state laws, but
the past 18 months of COVID–19 pandemic has demonstrated that
women entrepreneurs still face many structural barriers when they
start, operate, and attempt to grow small businesses. Throughout
the pandemic, women entrepreneurs have been more likely to re-
port a significant decline in the health of their business than their
male counterparts, according to the research conducted by the
Kauffman Foundation.
And historically, women-owned small businesses lag behind
male-owned small businesses in four key indicators of future busi-
ness growth: investment plans, revenue projections, staffing expec-
tations, and access to capital. While the pandemic has shined a
light on the structural barriers women still face, it has also dem-
onstrated that the Federal Government can play a key role in
breaking down those barriers and empowering women entre-
preneurs.
A recent report issued by the Government Accountability Office
found that the policies championed by Senate Democrats in the
Paycheck Protection Program and Health Care Enhancement Act,
Economic Aid Act, and the American Rescue Plan made later
rounds of the Paycheck Protection Program more equitable and ac-
cessible for underserved communities. While small business owners
received only 9 percent of the initial PPP loans authorized by the
CARES Act, the report found that the share of loans made to
women-owned small businesses, following changes made by Con-
gress, increased that to 16 percent. This is in line with the percent-
age of small businesses owned by women, which is also 16 percent.
This report is proof that through thoughtful, concerted efforts it
is possible to bridge the historical gaps that prevent underserved
entrepreneurs from starting and growing small businesses.
I was proud to work with my colleagues in the Senate, including
several on this Committee, to secure those improvements to the
PPP, and I am looking to build upon that work in the months and
years ahead.
Now as Congress continues to negotiate President Biden’s Build
Back Better agenda, a once-in-a-generation investment in our fami-
lies, communities, and small businesses, it is vital that we build on
the lessons learned during the pandemic to continue investing in
women entrepreneurs. That is why I am looking forward to hearing
the testimony of Tammira Lucas, founder of The Cube Cowork in
Baltimore and co-founder of Moms As Entrepreneurs. Dr. Lucas
will shed light on the unique barriers that women, including moth-
ers, face on the path to business ownership. I would also like to
congratulate Dr. Lucas on The Cube Cowork’s grand opening of its
expansion last week, making it the largest Black-owned coworking
space in the country. Congratulations.
I am looking forward to hearing from Women Impacting Public
Policy’s President and CEO, Candace Waterman, who advocates on
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3
behalf of women business owners to Congress. I know that that or-
ganization is celebrating its 20th anniversary next month, so
Candace, I want to thank you and your colleagues for your tireless
efforts to empower women small business owners over the last two
decades.
I hope to hear from you both about the tools and resources Con-
gress can create and improve to support women on their entrepre-
neurship journey and ensure their success.
The COVID–19 pandemic interrupted a period of tremendous
growth for women-owned businesses. Women-owned businesses em-
ployed 9.2 million people, 8 percent of the total private sector work-
force, and they generate $1.8 trillion in annual revenues, 4.3 per-
cent of the annual private sector revenues.
While these numbers seem small on the surface they tell a re-
markable story about the potential women-owned small businesses.
From 2007 to 2019, total employment by women-owned businesses
rose 21 percent while employment for all businesses declined by 0.8
percent. In other words, for the past decade women-owned small
businesses have been the drivers of economic growth in our econ-
omy, despite the myriad headwinds they face in the path to suc-
cess.
This fact is even more evident when it comes to minority women.
Between 2007 and 2019, businesses owned by minority women
grew by more than 163 percent. Imagine what our women entre-
preneurs could do if there were less obstacles in their way and if
they had more support during their entrepreneurship journey.
Supporting small businesses through the COVID–19 pandemic
has been the most challenging and the most important thing this
Committee has ever done. Our efforts to build back better in the
years ahead will be another incredible challenge, but they are our
opportunity to help our economy grow in a fairer, more productive
way.
We simply cannot waste the time that we have to make the proc-
ess in these areas. We must commit ourselves to using this oppor-
tunity to create thoughtful policies that will empower women entre-
preneurs for generations to come.
And with that let me yield to the Ranking Republic Member,
Senator Paul.
OPENING STATEMENT OF HON. RAND PAUL,
A U.S. SENATOR FROM KENTUCKY
Senator PAUL. Thank you, Mr. Chairman. The Chairman makes
a great point that women are doing very well in small businesses
across America, and I think every way have shown themselves to
be the equal of men, if not often the superior to men. But it is also,
I think, inadvertently an argument for why we do not need special
set-asides for women. I think they can compete on their own two
feet, just with men.
You know, when I took over as Ranking Member of this Com-
mittee I believed that our charge would be to create an environ-
ment in which all small businesses can flourish. Instead, our work
here, though, has focused almost exclusively on which side of the
scale the heavy hand of government should place its thumb. While
some businesses may have just been too large to qualify as small
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businesses and were ineligible for the Paycheck Protection Pro-
gram, the Biden administration has continued to violate the law,
to pay back, with taxpayer dollars, their political ally, Planned Par-
enthood.
Then came the Restaurant Revitalization Fund, whose race and
gender preferences were struck down by the Sixth Circuit for vio-
lating the Fourteenth Amendment’s guarantee of equal protection
under the law. It is simply galling that after Democratic governors
shut restaurants down, shut the economy down, that Congress
would insist that before owners receive assistance they are first
asked whether they are a man or a woman, Black or White, Paki-
stani or Iraqi, and that the answers to these questions determine
whether you go to the front of the line or the back of the line.
Which brings us to today’s attempts by the Biden administration
to favor one set of races and genders over others. Rather we should
embrace the words written by Justice John Marshall Harlan, in his
dissenting opinion in Plessy v. Ferguson. He said, ‘‘Our Constitu-
tion is colorblind and neither knows nor tolerates classes among its
citizens.’’
The free enterprise system is consistent with those words. Free
enterprise empowers those who innovate, who take risks, who work
hard, including women. In other words, free enterprise is the great
equalizer. The facts demonstrate that women entrepreneurs do not
need government handouts. While just shy of 60 percent of Small
Business Administration’s microloans go to women-owned or
women-led businesses, a majority of women entrepreneurs use pri-
vate loans and sources of funding to start their own businesses,
compared to just 20 percent who use SBA loans. Moreover, women-
owned businesses have a nearly 70 percent success rate with
crowdfunding, outstripping male-owned businesses by nearly 10
percent.
The history of women in business is a great one. Private tech
companies led by women achieve a 35 percent higher return on in-
vestment than similar companies led by men. Look around. Women
are succeeding like never before. Whether it be in academics or
business, women have proven themselves to be the equals of men.
Frankly, it is insulting to think that women need affirmative ac-
tion.
A century of economic history demonstrates, beyond a doubt, that
the best way to promote economic growth and upward mobility for
all is to adhere to free market principles. Those are the policies
that should be on the agenda today, but they are not. If the Biden
administration and most of my Democratic colleagues in the Senate
were truly interested in discussing the issues facing female entre-
preneurs today we would be here to discuss the impact of rising in-
flation, the growing supply chain crisis, inflation throughout the
system, and the effects they are having on American small busi-
nesses. Instead, Democrats are planning to exacerbate these issues
by spending trillions—trillions more of Americans’ dollars, money
that we do not have, in their attempt to remake America.
At a time when 86 percent of small businesses today say they are
concerned about inflation and 74 percent say inflation hurt their
businesses, Congress is now, led by the Democrats, doubling down
on failed big government socialist policies in precisely the wrong
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prescription, making it harder on small business. Rather, we ought
to rediscover old economic truths, that all entrepreneurs thrive
when they are encouraged to innovate and compete in a market-
place.
This Committee should work to end discriminatory and patron-
izing programs and instead focus on policies in which all small
business owners, no matter their race or gender, are most likely to
thrive. Thank you.
Chairman CARDIN. Thank you, Senator Paul.
[Pause.]
Chairman CARDIN. We will first hear from Dr. Tammira Lucas,
who is a ‘‘mompreneur,’’ a mother and entrepreneur. She is CEO
of The Cube Cowork, a coworking space in Baltimore that also pro-
vides childcare services, and co-founder of Moms As Entrepreneurs,
an organization that focuses on decreasing chronic poverty by help-
ing mothers build sustainable businesses. As of 2019, Dr. Lucas’
program, Moms As Entrepreneurs, has helped over 100 moms
launch businesses in Baltimore, and she recently expanded The
Cube Cowork space to increase opportunity for even more entre-
preneurs with children.
Dr. Lucas, it is a pleasure to have you here.
STATEMENT OF TAMMIRA LUCAS, Ph.D., CEO,
THE CUBE COWORK
Dr. LUCAS. Good afternoon, Chairman Cardin, Ranking Member
Paul, and members of the Committee. Thank you for having me
today. I am Dr. Tammira Lucas, CEO of The Cube Cowork, Balti-
more business leader, and business professor.
As a mom, wife, and entrepreneur, I struggle to choose my busi-
ness or my family. I quickly learned that I was not the only mother
faced with these struggles, after training hundreds of mom entre-
preneurs locally and nationally through my organization, Moms As
Entrepreneurs. I spent two years researching solutions to these
problems that many women entrepreneurs battle.
The results of my extensive research determined that mom entre-
preneurs all shared the same wants: more time, a network, and
support services to grow their business. I created a solution to ad-
dress these barriers to success for women entrepreneurs, The Cube
Cowork. The Cube Cowork is the largest Black-woman owned co-
working space in the United States, to provide a space where par-
ents no longer have to choose their businesses over their families.
The Cube Cowork provides onsite babysitting services, business-
building resources, a network, and office space rental.
The vast majority of growing businesses in the United States are
women, and more specifically, Black women. Unfortunately, this
same demographic experiences multiple pandemics, including the
lack of financial capital, human capital, race inequities, and social
capital to break the ceiling of 40 million to increase impact hiring.
During the pandemic, women entrepreneurs, especially Black
women entrepreneurs, were the most resilient, yet received the
least support. With the lack of capital that already existed pre-pan-
demic, women entrepreneurs had to figure out a way to survive
during and after the pandemic.
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What we saw in communities like Baltimore was women using
their creativity, social platforms, and the power of working together
to ensure their businesses sustain. In theory, this sounds profound,
but in reality, this should not be the case. We saw women business
owners being pushed out of financial bailout opportunities like the
first round of the PPP loans and EIDL, where big corporations,
who had the resources, benefited, and small women-owned busi-
nesses continued to struggle. This should not be the case.
This catastrophe taught us that women entrepreneurs need more
access to capital and resources that Women Business Centers pro-
vide. The Women Business Center should continue to be funded
and supported to help bridge the gap of support services needed to
sustain a business. For example, many women-owned businesses
could access resources like the PPP loans in the beginning because
they did not have proper accounting systems, banked with large fi-
nancial institutions, or had a payroll. Women-owned businesses
tend to not be in a place to have the resources to set up proper sys-
tem or hire full-time or part-time staff.
Sixty-one percent of Black women entrepreneurs start businesses
in retail, beauty, health, education, or social service sectors. They
are typically small, informal businesses with low margins and
crowded, competitive markets, and are more challenging to sustain
over the long term. This is due to the lack of knowledge, financial
resources, and family consideration. However, these businesses are
keeping the lights on and food in the refrigerators of families.
These businesses are the ones that are setting a foundation to close
the wealth gap in Black communities.
According to the Kauffman Foundation, 37 percent of moms do
not start businesses because of family considerations like childcare
access. For those who do start their businesses, nearly half of them
do not believe their businesses will succeed, which is why Black
women have fewer established business owners compared to their
high rate of new venture startups.
Access to key resources needed for entrepreneurship is unevenly
distributed in U.S. society, reinforcing the advantage of certain
groups while impeding the entry and catching-up of certain dis-
advantaged groups. Black mothers are often pushed into necessity
entrepreneurship, which often generates low income, and they have
fewer choices in how they engage economically.
Mothers who choose entrepreneurship as an attractive economic
opportunity with access to the right resources are better able to
start businesses and grow it. Mom entrepreneurs are ideally situ-
ated in close proximity to their potential customers and collabo-
rators in the center of their often-overlooked communities despite
these added pressures. They are in an ideal position to identify
business voids that address community needs and provide opportu-
nities to generate income and wealth.
The socioeconomic reality for Black mothers and women entre-
preneurs in Baltimore and similar cities are defined by the legacies
of structural racism, including redlining and underfunded edu-
cation, in addition to the wage gap women face. The actual reality
is that our economy would not sustain if it were not for women en-
trepreneurs and women consumers.
I have seven recommendations.
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Number one, continue to fund and expand Women Business Cen-
ters in underserved communities and cities.
Number two, accelerate finalizing the funding opportunity for the
SBA Community Navigator and ensure the organizations that re-
ceive funding to implement these services have the capabilities to
reach the underserved demographics. Too often, funding opportuni-
ties are given to organizations that do not have the capabilities to
reach the actual people that need the services.
Number three, under the Office of Women Business Ownership,
create an advisory board that is solely focused on addressing the
issue mom entrepreneurs face such as family considerations. Mom
entrepreneurs continue to be grouped under women entrepreneurs,
and there is a huge difference between being an entrepreneur as
a woman and being an entrepreneur as a mom.
Number four, create an advisory board that will help the SBA
interface look less daunting to everyday women entrepreneurs and
provide relatable outreach services. Most entrepreneurs do not ac-
cess resources offered by the SBA because the interface is not
friendly to those that need it most. We have to design access to
services that are equitable for all.
Number five, access to capital should be made easy for women
entrepreneurs to access, taking into consideration that more than
half of the 11.6 million entrepreneurs are moms living below the
poverty level and may not have a great credit rating or collateral.
This should not be the defining factor in whether they should ac-
cess capital to start or sustain their businesses and create
generational wealth for their families.
Number six, provide affordable childcare to women starting and
growing businesses. Often these resources are given to women who
are looking to go into the workforce but not women who are cre-
ating the workforce.
And Number seven, provide access to affordable health care.
Women entrepreneurs’ hesitation to start businesses often includes
the barriers to affordable health care as an entrepreneur. Because
of the lack of affordable health care for entrepreneurs, women tend
to work full-time jobs to obtain health care while working in their
business full-time. Women should not have to balance both or
choose.
In closing, in order to encourage more women to be entre-
preneurs, they need to know that they have the resources and sup-
port to do so. This is not just business resources but this includes
adequate housing, childcare, education, and mentorship.
Thank you for your time and the opportunity to share my exper-
tise and thoughts.
[The prepared statement of Dr. Lucas follows:]
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Chairman CARDIN. Thank you, Dr. Lucas, and we are very proud
of your activities in our city of Baltimore.
We will now hear, via the Web, from Mrs. Candace Waterman,
who is the President and CEO of Women Impacting Public Policy,
a national, nonpartisan public policy organization, advocating on
behalf of women business owners and its coalition of 79 business
organizations.
Mrs. Waterman has over 35 years of experience spanning across
the private and public sector, owning companies herself in the med-
ical, real estate, and hospitality industries. In her current role she
works in a bipartisan way with lawmakers like ourselves to impact
and influence policy that provides economic equity, procurement in-
clusion, and access to the global marketplace to women entre-
preneurs.
Mrs. Waterman, pleased to hear from you.
STATEMENT OF CANDACE WATERMAN, PRESIDENT AND CEO,
WOMEN IMPACTING PUBLIC POLICY
Ms. WATERMAN. Thank you so much, and good afternoon Chair-
man Cardin, Ranking Member Paul, and members of the Com-
mittee. It is an honor to meet you and to be invited to speak to the
Committee today.
My name is Candace Waterman, I serve as the President and
CEO of Women Impacting Public Policy, a national nonpartisan or-
ganization advocating on behalf of women entrepreneurs, strength-
ening their impact on our Nation’s public policy, and creating eco-
nomic opportunities while and forging alliances with other business
organizations.
Thank you for the opportunity to speak at today’s hearing, which
will highlight the strength of women small business owners during
the COVID–19 pandemic, the ongoing barriers to success these en-
trepreneurs face, and how Congress and the Small Business Ad-
ministration can better support small business owners and encour-
age more women to pursue entrepreneurial opportunities.
Women Impacting Public Policy is a national nonpartisan organi-
zation which educates and advocates on behalf of women-owned
businesses across the country. Since its inception in June 2001,
WIPP has reviewed, provided input, and taken specific positions on
many economic issues and policies which affect the bottom line of
our membership. The issues cover a broad range of current legisla-
tion and/or policies such as affordable health care, leveling the
playing field for women-owned businesses, opening up Federal pro-
curement policies for women-owned businesses, the implementation
of well-established Federal law which seeks to encourage women in
the marketplace, tax policies, energy, telecom, and more. Matters
which are not directly relevant to the economic health and well-
being of constituent businesses are not part of our agenda.
Since its founding 20 years ago, WIPP’s policy priorities have
shifted to meet the times and to address the emerging policy areas
impacting the economic health of women-owned small businesses,
such as digital infrastructure and workforce development. Addition-
ally, at its core, WIPP’s advocacy has always been focused on in-
creasing parity and equity for women-owned small businesses in
Federal contracting and access to capital.
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As an organization which represents the country’s over 12 mil-
lion women-owned businesses, we have within our ranks Repub-
licans, Democrats, Independents, liberals, conservatives and every
variety of opinion. We urge and encourage our members to become
involved and politically active as their consciences dictate.
Our organization surveys its membership on a regular basis to
determine which issues are priority issues for them, and we main-
tain the issue committees to review options and alternatively look
to them for advice on legislation that meets the needs of our mem-
bership.
In order to further our objectives, we maintain relationships with
all Members of Congress, as well as the incumbent Administration,
regardless of political affiliation, and we intentionally maintain our
nonpartisan approach.
WIPP has tackled Federal contracting issues since its inception.
Access to Federal markets continues to be a challenge for WOSBs,
given that the Federal Government has only met its modest goal
of 5 percent awards to WOSBs twice. One missing piece is good
data on these large, multi-year contracts also known as MACs. In
addition, the government does not have sufficient data on whether
subcontracting commitments have been met. A significant legisla-
tive victory was achieved in 2018, giving small firms more ‘‘run-
way’’ to transition out of the small business set-aside program and
into full and open competition. The law allows businesses to aver-
age revenues over five years rather than the previous three years
for purposes of determining their size standards.
WIPP will continue to advocate for changes to acquisition policies
that will generate more contract awards for women-owned small
businesses. Current efforts include support for expanding sole
source awards to small businesses, reinvigorating education and
support for the women-owned small business procurement program
in Congress and in the agencies.
WIPP’s efforts to level the playing field cuts across a wide set of
issues relating to the government’s acquisition policy. Without our
advocacy, small businesses and women-owned small businesses will
continue to lose ground as procurements become larger and longer.
Access to capital remains the top concern for women-owned small
businesses. As members of this Committee are aware, women-
owned small businesses have experienced great levels of hardship
due to the pandemic, and have struggled to access the capital nec-
essary to keep their businesses afloat. Without delving too deeply
into these hardships, it has been widely reported that businesses
owned by women were more likely to lay off employees, report
losses in revenue, or close permanently, more than any other demo-
graphic.
Also, in regard to financing, even when women successfully se-
cure financing, it is often less than what they originally requested
and certainly far less than what is needed. In a similar vein,
women apply for less funding, due to what I call application anx-
iety. On average, they ask for $35,000 less than men.
With all of that said, WIPP has committed to making access to
capital one of our top policy priorities. To that end, we frequently
engage with leaders in Congress and in the private sector to am-
plify measures that would increase women’s access to capital. This
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includes engagement with banks, fintechs, financial institutions,
NGOs and nonprofit organizations.
We also host monthly advocacy updates for our members to keep
them abreast of updates on the Hill as well as provide an oppor-
tunity to hear from policymakers like yourselves. Additionally,
WIPP hosts regular educational sessions for our membership on ac-
cess to capital.
WIPP was founded in 2001, with the sole intention of serving
America’s women-owned businesses through advocacy and edu-
cation. Since our founding, we have consistently prioritized the eco-
nomic health and well-being of constituent businesses and have
maintained bipartisan relationships at the state, local and federal
levels.
Like many organizations, WIPP has been confronted with the
rapid changes in the small business community as it relates to Fed-
eral contracting and procurement, technology, infrastructure and
economic opportunity. As these changes have occurred, WIPP has
made great strides to confront them head-on through our greatest
strengths, and that is advocacy, education, and mobilization of the
WIPP network.
Over the years, WIPP has been heavily involved with policy-
makers and experts in the private sector, whether that be through
participation in hearings, like the one we are having today, meet-
ings with key staff and committees, and through developing strong
partnerships.
Our actions have brought strong results on behalf of women busi-
ness owners. For example, WIPP fought for implementation of the
women-owned small business procurement program which gives
Federal agencies the authority to set-aside contracts for WOSBs. In
2015, WIPP pressed for, and achieved, the swift implementation of
sole-source authority to the WOSB Procurement Program. More re-
cently, WIPP has joined Senator Cardin, the Rockville Economic
Development and the Maryland Women’s Business Center for a
roundtable discussion about the issues that women business own-
ers face running their businesses.
WIPP also advocates for the collection of meaningful data as it
relates to financing and Federal contracting for small businesses,
an issue that has become increasingly important throughout the
pandemic. It is critical that policymakers understand how aid is al-
located and what can be done to better serve demographics that are
passed over for aid.
I would like to thank the Committee for inviting WIPP to testify
today, and thank you, Chairman Cardin, Ranking Member Paul,
and members and staff of the Committee for all of the work that
you do on behalf of America’s women small businesses. I look for-
ward to answering your questions and a robust discussion.
[The prepared statement of Ms. Waterman follows:]
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Chairman CARDIN. Mrs. Waterman, thank you very much for
your comments and your incredible record on advocacy on behalf of
women-owned small businesses.
We have been joined earlier, as I said, by Senator Paul and Sen-
ator Ernst. We also have Senator Hawley who has joined us by
WebEx, Senator Hickenlooper, and Senator Rosen, also by WebEx.
As I explained earlier, the members are coming in and out. If a
member on WebEx wishes to ask a question, if they just show their
video we will call on those that are on the WebEx.
But let me get—and I see Senator Hickenlooper took me up on
that suggestion, so let me call upon Senator Hickenlooper.
Senator HICKENLOOPER. I did not want to usurp your role as ask-
ing the first question but since you have called on me, first I just
want to thank both our guests and I appreciate how much work
they have done, and as busy as they are taking time out for our
hearing. It is important, and it makes a big difference, and it is im-
portant for us to get more perspective on some of the challenges we
are facing.
Women-owned businesses obviously are not getting their fair
share. If you look at startups, the percentage of venture capital
that goes to women-led startups is under 3 percent, which defies
any possible measure of what is going on. We have got a bill we
put together, the Small Business Investment Program, to try and
make sure that the actual professionals who are directing and ex-
panding the access to that kind of early-stage funding, that there
are more women and more people of color in those roles.
I also come from Colorado, and some of you might know Guild
Education. It is a women-started business that provides a market-
place for connecting large corporations, for these large corporations
to get their employees connected to various colleges and community
colleges. It was founded and is still run by a woman named Rachel
Romer Carlson, who, if she was on this call, she would provide a
lot of context of so many of the challenges that she faced and
chilling, really chilling stories. They had this great idea. Her busi-
ness is now valued at over $3 billion, and she is one of those rare
success stories.
Anyway, I would like to ask both of our witnesses today, you
know, I mentioned that we are working on diversifying the pool of
asset managers. Do you think that will help lead more capital to
businesses like yours? Is that something that you think would help,
and what else could the SBA be doing to encourage, or to make
sure and facilitate more venture capital going to women-owned
businesses?
Chairman CARDIN. Why don’t we start with Dr. Lucas.
Dr. LUCAS. Could you clarify, I did not hear the first part of your
question.
Senator HICKENLOOPER. So there are serious professional re-
straints on who qualifies. You know, the SBA has a program called
the Small Business Investment Program. It creates pools of money
that are directed and usually in partnership with private money,
but for early stage investors, for venture capital.
The people who run these funds are generally all white males,
and have been for a long time. This seemed an appropriate place
to reach out and propose legislation that would change that. So I
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was wondering if there are other things you are aware of that the
SBA should be doing to facilitate getting more funding to women-
owned startups and startups that are not just by women but people
of color, other marginalized communities. What could the SBA be
doing that would provide even more help?
Dr. LUCAS. Great question. So, of course, one of the challenges,
that, like you said, small businesses have is access, but it is access
to patient capital. And so if there were funds available, let us just
say $5,000 to $15,000, like a revolving fund, tied to technical as-
sistance, there is a good chance that there could be more mom- and
women-owned businesses to thrive.
Senator HICKENLOOPER. Mrs. Waterman, do you want to add
anything to the answer?
Ms. WATERMAN. Yes. I would just like to add, on top of Dr.
Tammira, this sort of mezzanine funding, if you will, or this sort
of bootstrap funding, to, you know, make payroll, or pay for certifi-
cations. I think that is really needed. And I think the other thing
is we need to look at the way that we are funding, because it is
not a one-size-fits-all. We need to meet the businesses where they
are to ensure that the methodology is appropriate when providing
funding.
Senator HICKENLOOPER. Got it. No, I appreciate that, and I agree
completely.
I am almost out of time, but just quickly, patents, the people that
apply for patents are predominantly men. Twelve percent of inves-
tors filing for patents in 2019 were women. That is painfully low.
Most of the best innovators I know, starting with my wife, are
women, and yet somehow we have made that process feel foreign.
And I guess we are running out of time. I will file this question
and you can answer it in more detail, but I would just quickly as
each of you, is there anything the SBA can be doing to facilitate
getting more women into that process of filing patents?
Chairman CARDIN. Mrs. Waterman, do you want to start first?
Ms. WATERMAN. Thank you. I would say by and large it is edu-
cation. Some people do not even understand the process, so I think
education is key at all levels, to understand, one, how to protect
themselves, how to protect their IP, and more importantly, how to
make certain that that IP is sustainable.
Senator HICKENLOOPER. I love that. You are right.
Chairman CARDIN. We have been joined by Senator Cantwell. I
am going to give her a moment. Senator Cantwell.
Senator CANTWELL. Yes. Thank you, Mr. Chairman. Thank you
so much for your——
Chairman CARDIN. A former Chair of our Committee, I might
point out.
Senator CANTWELL. Thank you. I love our partnership, because
even when we work, the Chairman of the Committee, you did such
great work in helping us with access to capital, and now that I am
over at Commerce and you are here we are partnering again with
your great help on the Minority Business Development Agency——
Chairman CARDIN. Thank you.
Senator CANTWELL [continuing]. And hopefully we will get a
record. That was your legislation that was authorizing that organi-
zation.
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Chairman CARDIN. And I just want to underscore that point. We
were able to get the SBDA language included in the infrastructure
thanks to Senator Cantwell, give it permanency and expand its ap-
plications, which is a critical tool to help the underserved and mi-
nority communities of small business. And Senator Cantwell, thank
you so much for your work on that.
Senator CANTWELL. So we are very excited about that, because
one of the issues is now, obviously, putting more money into that.
So I do not know if the witnesses—you know, we have a couple of
organizations in the State of Washington that are very focused on
minority women business organizations and try to grow access to
capital. So I do not know if the witnesses want to talk about access
to capital. What we like about the MBDE is similar to the gap we
found at SBA, there are the programs but where is the advisory
help and support and some of those mentoring programs, the most
senior people in business. Well, guess who they ended up being?
White men. So when it came to the products and services that
women might be offering, they were not as expert on what those
products and services might be, or the interest.
So anyway, I just do not know if somebody wants to comment on
access to capital issues as it relates to trying to marry up, particu-
larly for the minority community, what we need to do.
Chairman CARDIN. I think maybe Dr. Lucas can give her per-
sonal experiences that she confronted in her efforts.
Dr. LUCAS. Absolutely. So let me first say, access to capital has
always been a hot topic and a huge barrier for women, especially
minority women entrepreneurs. And the major problem with access
to capital is that often minority women, especially those in under-
served communities, do not have the credit score or the collateral
to access funding. And I believe Congress could better support
these entrepreneurs with early startup funding that does not have
many barriers or contingencies.
Let’s think about the mom from West Baltimore, me, who desires
to start a business and is currently working a job that barely pays
her bills. The chances of her having a good credit or collateral is
very low. She should not have to give up on her entrepreneurial
dreams because of generations of poverty and structural racism
that she was more likely born into.
There is a huge opportunity to align access to capital to federally
funded social service program, because contrary to what people
think, many individuals who qualify for social services want more
for themselves, but we have to design programing and opportuni-
ties to allow them to obtain more.
Senator CANTWELL. Thank you, Mr. Chairman.
Chairman CARDIN. Let me followup on some of these points.
First, Dr. Lucas, thank you for your seven-point suggestion, and
both of you have mentioned access to capital issues and the chal-
lenges with capital. I want to go down some of these issues and I
want to get to the experiences under the Paycheck Protection Pro-
gram, which I think underscores some of the structural challenges
we have in underserved communities.
First, in regard to Women’s Business Centers, we are very proud
of our Women’s Business Centers. Thank you for that recommenda-
tion. We just opened up one recently in Morgan, and we also, by
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21
the way, opened up one in Salisbury. So we are now fortunate to
have three Women’s Business Centers in the State of Maryland,
and they are all very valuable.
In regard to the navigator program as part of the American Res-
cue Plan, your suggestions there are good suggestions. We have got
to make sure it is implemented in the way that reaches the under-
served communities.
The family considerations. Senator Cantwell’s point was so well
taken, the challenges that you have in your answer. Cowork is
truly unique, and we are blessed to have you in Baltimore, but
there are so many communities that do not have a Cowork, where
a woman can take care of her family obligations as well as enter
the workforce and be an entrepreneur.
We are trying to correct that in the Build Back Better agenda.
Now that is being negotiated as we are here today. We hope this
is going to be successful within the next 24 hours. But we deal with
childcare, affordable childcare. We deal with health care access,
which are critically important if we are going to be able to get the
full entrepreneur participation in our economy, as you both have
pointed out so well.
But let’s get to capital because capital really is, I think, the driv-
ing force. Senator Hickenlooper mentioned the SBIC. It is one of
the tools available for capital, but it is a closed shop today. It is
a narrow group of entrepreneurs who can benefit from the SBIC.
And one of the areas that we are trying to expand that is to get
fund managers that represent our community, particularly the un-
derserved community, so that we can get startup capital and ven-
ture capital to minority small businesses and women-owned small
businesses. Today the percentages, as Senator Hickenlooper point-
ed out, is virtually non-existent, the availability of venture capital.
So we need to be able to do a better job in all of that.
So my question to you is, what do we take away from the Pay-
check Protection Program? This was the largest single program
ever devised to help small business—$800 billion of funds were
made available in a relatively short period of time.
Now here is a program where there was no risk to the bank be-
cause it was 100 percent guaranteed by the government. We paid
their costs. We did everything we could to make it easier for them
to accept applications quickly in order to get money out to save
small businesses. And yet we know, during the first rounds of PPP,
the underserved, underbanked communities, women-owned small
businesses were not represented in the numbers that represent the
number of women-owned small businesses in our community.
So I guess my question to you, what is the lesson learned from
this? We did modify the program as we went forward, including
making sure that there were allocations to mission lenders that
have a much better record in underserved communities, and we did
expand the EIDL program, which is much more direct SBA involve-
ment rather than the banks. And then lastly, we had a grant pro-
gram because, as you pointed out, Dr. Lucas, in some cases small
businesses cannot take out loans. The credit is just not there. The
assets are not there. They do not want to take out additional loans.
They need grants.
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So my question to you is, as we look at moving forward, what is
the lesson learned from the PPP experience, which got off to a
rocky start with women-owned small businesses. As we look at
building back better, access to capital, women-owned small busi-
nesses, where should we put our priority?
I will start with Mrs. Waterman. If you have some view on this
I would appreciate it.
Ms. WATERMAN. Absolutely. Thank you. You know, we totally un-
derstand that the pandemic took its toll, right, on businesses, par-
ticularly on those women and minority firms, with more than 71
percent of them having a decreased business revenue. I think that
PPP and EIDL did work. I think that it worked for what it was.
I think as we look at next steps, if you will, in our lessons learned,
we have got to understand that the funds that were provided dur-
ing that time, many people took it out of desperation. And so as
they are desperate to keep the doors open, desperate to pay their
employees, desperate to keep homes afloat, we have got to have the
education for people to understand the cash flow, what is the fund-
ing that they are receiving, what does that mean, you know, what
funding is right for them? Some of our members, I had a few who
said, you know, they actually did not really want to have what it
is that they received, meaning because the terms and conditions of
it were just too stringent for them.
So I think, one, education is key. Having us understand the true
impact on the businesses that receive this funding, where are they
at now, what funding do they need going forward, and are we en-
suring that we are educating them on how to manage the P&L so
that it can be a sustainable funding, not just a ‘‘right now’’ type
of funding.
Chairman CARDIN. That is very helpful, and Dr. Lucas, your rec-
ommendations on the navigators would certainly help in that edu-
cation and outreach suggestions to make sure the capital gets out
in a more equitable way.
I am going to yield to Senator Duckworth, who is on WebEx, and
give her a chance to ask questions.
Senator DUCKWORTH. Thank you very much, Mr. Chairman, and
I want to thank the folks for being here on this very important
topic.
Earlier this year a joint survey of nearly 1,200 female entre-
preneurs was conducted to understand how they were affected by
the pandemic, and the survey findings demonstrated the resilience
of women entrepreneurs and just how important they are to re-
building our economy. For example, many of the women surveyed
had started a new small business over the past year, and of these
new ventures, nearly half were owned by women of color.
Ms. Waterman, could you address how increasing Federal invest-
ments in women entrepreneurs would deliver a strong return on in-
vestments for local economies and job growth?
Ms. WATERMAN. Absolutely. You know, I say investing in women
is an investment in our future and our economy. We know that
women make 85 percent of the decisions in the household, they in-
fluence the other 15 percent, and when you overlay that with a
business owner being a woman, and opening businesses at record
rates prior to COVID, showing their resilience and innovation, I
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think those are the components, right, and the recipes for success
in terms of knowing that the return on investment is there as you
invest in women-owned small businesses, or in women businesses,
in particular. They will have the funding to, again, not to startup
their companies but to grow their companies and then be able to
impact our economy in a very strong manner, as we are looking to
make certain that we are moving from crisis to recovery.
Senator DUCKWORTH. Thank you. I could not agree with you
more about the importance of supporting women-owned small busi-
nesses at the Federal level and the need to specifically help female
entrepreneurs. It is why this summer I reintroduced my Inter-
agency Committee on Women’s Business Enterprise Act. I was
proud that our Committee chairman, along with Senators Tim
Scott and Susan Collins, joined me to introduce this bipartisan bill
that simply seeks to restore the Federal interagency committee
that was originally created to lead a whole-of-government effort to
support and promote women entrepreneurs.
Ms. Waterman, in your testimony you mentioned the need to bet-
ter understand how Federal aid is reaching, or failing to reach in
your answer to the Chairman just now, as well, how Federal aid
is reaching or failing to reach women small business owners, par-
ticularly women of color? Do you believe that restoring and reinvig-
orating the Interagency Committee on Women’s Business Enter-
prise would improve Federal Government’s efforts to solve long-
standing challenges, such as making sure that Federal support is
actually reaching women-owned business enterprises, sending them
the most appropriate support that they need?
Ms. WATERMAN. I say a resounding yes, and I say that, in June
of this year we submitted a letter to Speaker Pelosi and leaders
Schumer, McConnell, and McCarthy, to express our support of the
Interagency Committee on Women’s Business Enterprise Act. And
we know that that agency is really critical to the Federal Govern-
ment as it develops policies that would support these women busi-
ness owners.
After the last 18 months that we have had, which has been ex-
ceedingly challenging for women businesses, in particular, it is our
hope here at WIPP that Congress can work together, in a bipar-
tisan manner, so that Federal Government can provide targeted as-
sistance to this demographic of women entrepreneurs as they seek
to start and grow their businesses.
Senator DUCKWORTH. Thank you. I want to switch gears a little
bit and talk about the care economy. I have been frustrated with
a recent debate that sort of tries to separate so-called real infra-
structure investments like roads and bridges and airports from in-
vestments in other economic programs that I think are just as im-
portant in the care economy.
I think there is a false dichotomy here that ignores the reality
that the care economy investments would empower more parents
to start new businesses and level the playing field for small busi-
nesses that struggle to compete with large corporations because
those large corporations can afford paid leave but the small busi-
nesses that are just starting out just simply cannot afford it, no
matter how much they want to provide it.
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That is why I led 14 of my colleagues in sending a letter to Sen-
ate leadership pushing for major investments in caregiving as part
of any Build Back Better package.
Dr. Lucas, you highlighted mom entrepreneurs in your testi-
mony. Could you address the caregiving challenges confronting
mom entrepreneurs and address how enhancing our caregiving in-
frastructure from expanding affordable childcare to making home
and community-based services accessible to our loved ones could
help these entrepreneurs to start and grow their businesses?
Dr. LUCAS. Absolutely. Thank you. So just to kind of put some
context to this, the median annual income for full-time female en-
trepreneurs is $40,000. The average cost of childcare just in Mary-
land is $15,335, the average yearly rent is $16,800, and the aver-
age yearly grocery bill is $8,600 for a family of three. Women are
expected to raise families without assistance or work unfulfilled
jobs, right? So in order for you to qualify for daycare vouchers, that
is just a whole different battle by itself. A family of three has to
only have an income of no more than $60,000, right. And so a
Maryland resident, they either have to take their spouse or the
child’s father down for child support.
There are all these guidelines in order to receive assistance. And
so these requirements are not realistic, nor do they support the
mom who desires to start or run a business, and I think that is ex-
tremely important for us to really look at how our social service
system is set up and how we are constantly pushing mothers into
low-income jobs.
Senator DUCKWORTH. Thank you so much. I am over time, Mr.
Chairman. Thank you.
Chairman CARDIN. And let me thank Senator Duckworth for her
leadership in regard to the Interagency Task Force. Your work has
been incredible there on behalf of women, so thank you for your
leadership on these issues.
I want to thank both of our witnesses for their testimonies today.
We are going to have a chance to deal with the issue Senator
Duckworth was referring to in the care economy. We clearly are
going to make that one of the major centers of our Build Back Bet-
ter budget that we are working on right now. We are looking at
strengthening the tools in the SBA toolkit to deal with the under-
banked, underserved communities, with women-owned small busi-
nesses. We are optimistic. We are working very closely with the
Biden administration, and we are together in our priorities and
with our counterparts in the House.
So I particularly want to thank our stakeholders who have been
working with us, including the Women Impacting Public Policy.
You have been a great partner for us in these efforts. And as I said
earlier, to Dr. Lucas, we are very proud of what you do in Balti-
more, filling such an important need so that entrepreneurs, women,
moms can enter the entrepreneurial space and help themselves and
help our community.
With that the Committee will stand adjourned with the thanks
of the Committee to our witnesses.
[Whereupon, at 3:44 p.m., the Committee was adjourned.]
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OPDS05-437224 with DISTILLER Insert offset folio 012 here 47359.012
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OPDS05-437224 with DISTILLER Insert offset folio 013 here 47359.013
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OPDS05-437224 with DISTILLER Insert offset folio 014 here 47359.014
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OPDS05-437224 with DISTILLER Insert offset folio 015 here 47359.015
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OPDS05-437224 with DISTILLER Insert offset folio 016 here 47359.016
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OPDS05-437224 with DISTILLER Insert offset folio 017 here 47359.017
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OPDS05-437224 with DISTILLER Insert offset folio 018 here 47359.018
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OPDS05-437224 with DISTILLER Insert offset folio 019 here 47359.019
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Æ
OPDS05-437224 with DISTILLER Insert offset folio 020 here 47359.020
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File and source
- File
- CHRG-117shrg47359.pdf
- Size
- 7,421,276 bytes
- SHA-256
- b977e4d8c0b25358a25db476c13d4d2b302cccc13700681888112d4a836ebdc3
- Our copy
- CHRG-117shrg47359.pdf
- Original
- www.govinfo.gov