We hope that you had a chance to read our last President’s Message, titled “What Will (Y)our Legacy Look Like.” The gist of the message was that each of us is responsible for our part of the continuing saga of Black History in America. Whatever it is that you do, however you do it, you will be remembered – for better or worse – for your contribution to the welfare of future generations.
One other point made in our recent effort was a “salute” to the nameless, faceless millions of shopkeepers, craftsmen and other silent warriors in our battle for economic parity. Have you ever wondered why “Mr. Jones” only had one store, or why “Mrs. Brown” only had one restaurant, regardless of the obvious quality of their service?
Well, among others, that’s the reason for our second Pillar of Service – Access to Capital. Far too often our enterprises don’t experience the growth and expansion common to other small businesses because the money just isn’t available from conventional sources. Banks and investors have concocted a litany of “reasons” that Black-owned businesses are too risky (primary among them is the fact that Black consumers are so valuable to other businesses – but that’s a whole ‘nother story!) to deploy their resources.
From our historic alliance with the National Bankers Association to our engaging the brainpower of economist William Michael Cunningham for his expertise in crowdfunding, we have been unrelenting in our pursuit of solutions to this dilemma. In fact, this month we offered our input to Elizabeth Murphy, Secretary of the U.S. Securities and Exchange Commission regarding the potential of this new financing tool.
For your information, here’s a glimpse of USBC’s approach to our First Pillar of Service – Advocacy – in support of crowdfunding. On Thursday, November 21, 2013, the U.S. Black Chambers, Inc. (USBC) attended the Capital Formation Forum hosted by the U.S. Securities and Exchange Commission (SEC). The Forum focused on the Jumpstart Our Businesses Start Ups (JOBS) Act, a law that we believe promotes small business growth and access to startup funding by enabling micro and small businesses to raise capital through various website platforms known as Crowdfunding portals. The JOBS Act also provides relaxed regulatory requirements (over traditional forms of financing) for individual investing in startups. There are seven Titles in the JOBS Act. Title III pertains to Crowdfunding and Title VII requires the SEC to reach out to women and minority businesses to alert them about the capital raising opportunities created by the Act. Click here for the official statement.
Following the forum on November 21st, the U.S. Black Chambers, Inc. co-hosted a Focus Group on Thursday, December 18, 2013 with the SEC Office of Minority and Women Inclusion (OMWI) office. With several of our strategic partners, we discussed opportunities and challenges associated with the implementation and regulation of crowdfunding. See our USBC comments here.
On Wednesday, January 15, 2014, USBC participated in the Small Business Crowdfunding Roundtable hosted by the Office of Advocacy at the U.S. Small Business Administration (SBA) to share recommendations to make the proposed crowdfunding rules more “user friendly” for the business community.
Emphasizing our presence on Capitol Hill, on Thursday, January 16th, USBC attended the House Small Business Subcommittee on Investigations, Oversight and Regulations hearing titled, SEC’s Crowdfunding Proposal: Will It Work for Small Businesses?
We applaud the SEC’s decision to use their Office of Minority and Women Inclusion to ensure that diverse business communities are aware of the pertinent changes. The OMWI can play a vital role in shaping JOBS Act policies that will help our businesses grow. We look forward to working with the OMWI Office to educate our stakeholders and communities about the risks and rewards of this type of capital formation and how to leverage it optimally. Our Chief Economist, William Michael Cunningham, was recently featured in Black Enterprise Magazine highlighting the reasons that crowdfunding is a game changer for minority businesses. See the Black Enterprise story here.
We believe the proposed Title III regulations are an important step forward, and will help democratize capital access for American small business, and for African American businesses specifically. For the first time since the implementation of the Small Business Act (SBA) of 1953, we are positioned to move far and fast in meeting the capital needs of the largest job creation source in our community. Correctly implemented, Title III will open the flow of capital to a sector of the business community that has been shut out for far too long.
We will keep you posted on this pertinent issue as it moves through the rulemaking process. The ability to tap into capital for expansion made available through crowdfunding just may be the answer to the hopes, dreams and prayers of Black business owners. That’s what our legacy will look like!
In the Spirit of Success,
Ron Busby, Sr.
U.S. Black Chambers, Inc.