Legislation seeks to provide Shark Tank exemption to allow women and minority-owned businesses to grow
On July 9, 2019, Congresswoman Robin Kelly introduced the Women and Minority Equity Investment Act (H.R. 3633); the legislation will make a commonsense tweak to existing Small Business Administration (SBA) programs that will expand venture capital access for participating business owners and companies.
“Anyone who has watched Shark Tank knows that investors don’t just part with their money. They want to be part of building a company; they want to ensure success for their investments,” said Congresswoman Robin Kelly. “Unfortunately, our current laws and policies do not reflect this reality of today’s capital market. This bill preserves the program’s intention – aiding, training and resources for disadvantaged business owners – while allowing them to access venture capital to grow their business and become industry leaders.”
The Women and Minority Equity Investment Act would amend participation requirements for SBA’s 8(a) and 8(m) programs. Current policy requires that a qualifying female or minority businessowner own an unconditional majority of the business. However, the definition of ‘unconditional’ has essentially prevented equity investment in these companies and forced businessowners to choose between program participation and growing their businesses.
Congresswoman Kelly’s Women and Minority Equity Investment Act amends these requirements to ensure disadvantage businessowners can participate in the program so long as a socially or economically disadvantaged individual or individuals retains 51 percent or more ownership stake in the business.
“Fundamentally, this bill is about bringing older SBA programs into modern reality. Requesting a board seat is not an uncommon practice in 2019. Forcing business owners to choose between the program and capital simply makes no sense,” added Congresswoman Kelly.
Bipartisan companion legislation was introduced in the U.S. Senate by Small Business Committee Chairman, Senator Marco Rubio (R-FL), and Senator Maria Cantwell (D-WA) on June 26th.
“I’m pleased that Small Business Chairman Rubio and Senator Cantwell agree that the current law and policy prevent many business owners from accessing needed, private capital. I’m deeply grateful that this effort could be bipartisan and bicameral, making Congressional passage of the legislation much more likely,” added Congresswoman Kelly.