Women entrepreneurs have notoriously faced hardships in gaining access to capital, from lack of information and resources and local and state government assistance, to facing cultural biases from investors. Without adequate capital, women cannot make their creative ideas a reality, nor can they afford to maintain the businesses that provide jobs for a significant portion of the population. According to U.S. Census Bureau data, women own 36 percent of privately-held businesses and contribute $3 trillion to the economy due to job creation—creating 16 percent of jobs in the nation.
Watch the video below of industry experts discussing access to capital from the micro level to billions of dollars. Panelists included Terri Billups, Assistant District Director of Economic Development at Los Angeles District Office of the SBA; Desiree Patno, CEO & President of NAWRB; Advisor for Amicus Brain Innovations, Inc; Chairman of NDILC; and CSO of Zulu Time; Vanessa Nicole Dawson, Founder of The Vinetta Project and Contributor to Forbes; and Sean Davatgar, Chairman and CIO at Dava Capital (SFO).
As part of her SBA career, Terri Billups was the Deputy District Director for the SBA, Michigan District Office covering the entire state of Michigan, and the Deputy District Director (DDD) for the Pittsburgh District Office in Pennsylvania. With almost three decades specializing in the Housing and Real Estate Ecosystem, Desiree Patno leads her executive team’s expertise of championing women’s economic growth and independence.
Vanessa is a serial entrepreneur and active angel investor with a background in Digital Development and Retail Finance. She began her career in retail finance and private equity in Vancouver and New York. Sean Davatgar was a special guest of the panel, and his company Dava Capital (SFO) is an investment advisory and management firm focused on the development and implementation of business strategies.
Desiree started the discussion by asking the panelists how new business owners start to obtain capital. Terri states that entrepreneurs who have just started their own business receive funds from using their own savings, borrowing from family and friends, or getting a commercial loan if they qualify. Some businesses even get their start by buying against their credit card, which can be risky, “but this is realistically where most businesses start.”
Terri adds that the first thing business owners should do is reach out to their lender. “How many of you have a relationship with your banker as you do with your doctor?” Terri usually asks people. You usually wouldn’t see a doctor who didn’t know you are or your medical history. However most of us will go to a banker who doesn’t know who we are, and this is because many of the transactions we make with our bank are either online or through an ATM. However, the banker is in charge of your financial health, just as a doctor oversees your physical and mental health.
This is why Terri always encourages people to get to know their bank. To do this you should go to the bank occasionally and make yourself known by introducing yourself and asking to meet the relationship manager. Many people have different banks so she suggests finding whatever fits. “If you do not get approved for a commercial loan, this is where the SBA comes in,” Terri stated. The SBA was always known as “The Lender of Last Resort.” Anyone can visit one of the SBA’s women business centers with their business plan for counseling free of charge. The SBA has programs for you at any stage of your business, as well. Ben & Jerry’s and Urban Armour are just a couple of successful businesses that started with SBA.
The SBA also offers disaster loans to small businesses, homeowners and renters affected by natural disasters. This information is discussed in-depth in the 2019 NAWRB Women in the Housing Ecosystem Report (WHER). Here is an excerpt below regarding small businesses:
“The SBA offers low-interest disaster loans for businesses, private nonprofits, homeowners and renters who need assistance with uninsured costs. Even those insured for natural disaster damage are encouraged to apply for a SBA Disaster Loan The SBA can lend you the amount of your total loss, even if you are unsure about how much your insurance will cover.
During Fiscal Year 2017, the SBA approved a total of 27,263 disaster loans for a total of $1.7 billion— $1.3 billion for home disaster loans and $296 million for business disaster loans. The SBA processed 84,705 home loan applications and 10,882 business disaster loan applications, making a total of 95,587 processed loan applications.
Small business owners have additional resources at their disposal during the recovery process. If you have a loan from the SBA, you may be eligible for deferred loan payments. For instance, if your loan postdates August 25, 2017 and you are located in a federal disaster area, your principal and interest payments will be deferred for 12 months. If your business is located near a disaster area, you may be eligible for a 9-month payment deferral.
Small business owners can apply for federal assistance—in the form of cash grants— through the FEMA, online or by calling 1-800-621-FEMA. Local Small Business Development Centers (SBDCs) are available to help small businesses complete forms for disaster relief, recover records and relaunch their businesses.
Businesses can be proactive in protecting themselves against damages from potential natural disasters by being insured for Business Interruption. Many commercial insurance policies provide coverage via endorsement for business income loss due to a direct loss, damage or destruction to the insured property by a natural disaster.”
Vanessa informed the audience about her work, which focuses on equity and access to capital through venture capital. “Women are highly underfunded in equity and early stage investing,” she stated. In her experience, she saw that a lot of business owners or entrepreneurs, especially men, would go to their friends for capital that they trusted and vice versa. This made her curious about why more women are not funded this way. A lot of equity capital is dominated by men, so her goal was to find out how women can network more to gain opportunities in access to capital.
To achieve this goal, Vanessa launched her company, The Vinetta Project, which sources for tech-based women-owned businesses and helps them access the capital they need to achieve. They source around 1500 female-run tech companies a year, and they help them with their pitch, financials, and whatever they need before sending their information to equity investors.. Through Vinetta, Vanessa has cultivated a diverse global network of founders, investors and corporate partners focused on closing the gender based funding gap for female tech founders. Vinetta has enabled the flow of over $225M in venture Capital to Seed stage companies.
Sean took the stage to share his own difficult experience building capital when he started his business, from living in Beverly Hills to sleeping on his mattress in a warehouse in Anaheim when he was in debt. Through his private equity firm, he helps tech businesses succeed by making sure they some assets to be sustainable, as well as figuring out the value each company brings and how to develop it. The company then matches the value to the demand.
Knowing these resources and making sure that we get back up when we get knocked down is important for the success of any business, as Desiree noted during the panel. As the diverse panel showed, there are resources available for businesses of any size and with varying goals.