Legislation seeks to provide Shark Tank exemption to allow women and minority-owned businesses to grow
information provided by the Office of the Congresswoman
WASHINGTON, DC (July 23, 2019) – On July 9, 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 Kelly. “Unfortunately, our current laws and policies do not reflect this reality of today’s capital market. This bill preserves the program’s intention—aid, 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 disadvantaged business owners 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.