Contact: Thomas Mentzer, (202) 261-5627, tmentzer@ui.urban.org

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KANSAS CITY, MISSOURI, May 17, 2007 -- Model programs that provide women entrepreneurs access to capital were discussed by a panel of researchers and practitioners at the annual conference of the Association for Enterprise Opportunity today. The discussion focused on an Urban Institute report identifying key elements of successful programs, ranging from microenterprise incubators to venture capital funds.

Although there has been a proliferation of these programs over the past decade, and the number of women starting businesses has grown dramatically, women entrepreneurs still lag behind men in obtaining capital for their businesses.

The Urban Institute report identifies characteristics that contribute to success and reviews constraints and barriers that remain. The report draws policy recommendations based on profiles of 13 best-practice and 3 “promising practice” programs at community organizations, banks, and venture capital funds across the nation. The panel examined the ways successful programs are able to help their clients start and expand businesses.

“Capital Access for Women: Profile and Analysis of U.S. Best-Practice Programs” was written by Urban Institute researchers Harold Salzman, Signe-Mary McKernan, Nancy M. Pindus, and Rosa Maria Castaneda.

Common elements of successful programs

• Scale. Programs were able to reach many women through a variety of means, such as becoming a large organization in a densely populated urban area or developing a network to serve a sparsely populated but large geographic area.
• Scope. Providing a wide range of services enabled these programs to address multiple needs beyond providing capital to women.
• Leadership. The programs had effective, committed leaders who were able to manage internally and develop strong external relationships.

“The programs offer examples that should stimulate discussion among capital providers and others about ways to expand and improve opportunities for women entrepreneurs,” said Pindus, chair of the panel. “Programs and policies of the past decade have created new opportunities. Now we need to build on those successes.”

Policy recommendations

• National banks could establish alternative credit evaluation procedures or have community loan officers who can handle individual loan evaluations outside of the credit scoring system.
• Banks could develop formal relationships with targeted community programs.
• Policymakers could support evaluation of microenterprise programs as an employment and training resource and provide funding on the same basis as other work-related programs.
• The equity community could develop hybrid forms of investments that provide “patient capital” and support founding entrepreneurs.
• Smaller programs could increase their scale and scope through partnerships and other means. They could also develop entrepreneurship pathways and assist their small-business clients with sales and marketing guidance.
• The funding community could consider the benefit of tracking loans by type or referral source and changing the nondiscrimination restrictions that limit data collecting.

The report, available at www.urban.org/url.cfm?ID=1001061, was made possible by funding from the Ewing Marion Kauffman Foundation.

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