* Access to Capital ~ The National Minority Supplier Development Council (NMSDC) has completed a National Survey that illuminates issues of Access to Capital among Minority Business Enterprises (MBEs).
The Survey examines MBEs and “focuses on the internal factors, those within a minority firm’s control, which may hamper their ability to obtain critical growth or acquisition capital.”
Education is key, the Survey finds, to improving access to capital, along with more opportunities for networking between capital providers and minority entrepreneurs.
Internal factors among MBEs that contribute to lack of access to venture and other forms of institutional capital include: the lack of growth-oriented succession planning for owners; lack of knowledge about sources of capital, combined with a lack of engagement by owners seeking funding alternatives beyond banks; and a negative perception of venture capital.
MBE certification requirements may also inhibit owners from seeking institutional funding that is likely to make their businesses ineligible for certification.
Access to Capital
Among the Survey’s recommendations are online and on-site education promoted by networks such as NMSDC to teach MBEs best practices for fundraising, entrepreneurship in high-growth sectors, and better understanding of all types of financial tools, fostering an “overall level of financial sophistication to be able to interact in a substantive way with various fund managers.”
The Survey also concludes that relationships need to be significantly improved between networks of MBEs, such as NMSDC, and networks of investors.
Demographic shifts mean that in coming decades more than half of all Americans will belong to minority groups, greatly affecting employment and entrepreneurship which, along with small business ownership, is the greatest driver of wealth and job creation in the U.S.
“Improving access to capital among underrepresented minority entrepreneurs is more than a social issue,” the Survey states. “It is an economic imperative.”
“Our National Survey on Access to Capital highlights the need for initiatives, such as that announced in August by the Obama Administration and the National Venture Capital Association, to create a more inclusive environment for minority-owned business enterprises to identify and obtain capital funding,” said Joset Wright-Lacy, president of NMSDC.
“We offer programs designed to provide tools and skills to educate minority business owners in the means and best practices of raising capital. The NMSDC network includes investors and financiers who are very interested in investing in our certified MBE firms.”
The National Survey on Access to Capital among Minority Business Enterprises was conducted in early 2015, using a representative sample of the population of interest – in this case, minority business enterprises certified by NMSDC.
To review the Survey, please click on this link: NMSDC National Survey on Access to Capital among Minority Business Enterprises.