Bill Overview
Title: Connecting Small Businesses with Capital Act
Description: This bill requires the Small Business Administration to publish resources about the assistance available to small businesses for raising capital from investors through crowdfunding and other limited offerings of securities.
Sponsors: Rep. Flood, Mike [R-NE-1]
Target Audience
Population: Small business owners looking for capital
Estimated Size: 9000000
- The bill directly targets small businesses as it involves information about capital raising.
- The bill involves crowdfunding and limited offerings, which are common methods for small businesses to acquire funding.
- Small business owners, especially those looking to expand or needing capital will be the primary beneficiaries.
- Potential investors in small businesses may be indirectly impacted as the bill could lead to more investment opportunities.
Reasoning
- The policy is designed to help small business owners access capital, which could improve their ability to grow their business. As such, many small business owners actively seeking capital could be positively impacted.
- The estimated budget constraints mean that not all small businesses will be reached in the first few years. Hence, only a fraction of small business owners looking for capital might experience the policy's effects initially.
- Indirect effects may include increased opportunities for investors, but the direct impact is focused on small business owners.
- The variance in the impact is likely due to differences in business needs, existing access to capital, and the ability to engage with the resource materials effectively provided by the policy.
Simulated Interviews
Owner of a Brewery (Austin, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- Access to clear information about crowdfunding could greatly aid his business expansion.
- Feels currently unprepared to navigate investment acquisition on his own.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Tech Startup Founder (New York, NY)
Age: 30 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- The provided resources would allow her to make informed decisions about equity crowdfunding.
- Believes that this would lower the barrier to reaching investors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Established Auto Parts Manufacturer (Detroit, MI)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- Additional knowledge on raising capital is interesting but not urgent.
- May look into resources if considering expansion, but not a current priority.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Restaurant Owner (San Francisco, CA)
Age: 38 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 8.0 years
Commonness: 8/20
Statement of Opinion:
- Would value information on how to pitch to investors and what options exist.
- Sees crowdfunding as a potential option but feels overwhelmed by the process.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Owner of a Small Craft Shop (Portland, OR)
Age: 28 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 6/20
Statement of Opinion:
- Seeing a structured resource could clarify pathways to acquire funding.
- Feels excited about learning new methods to attract investors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Traditional Farming Business Owner (Rural Georgia)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 14/20
Statement of Opinion:
- Not particularly interested in seeking investment through new means.
- May review resources out of curiosity but unlikely to change approach.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Owner of a Fitness Studio (Chicago, IL)
Age: 41 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 5/20
Statement of Opinion:
- Access to a centralized information hub would provide needed clarity about investment options and strategies.
- Currently feels the information is fragmented and hard to navigate.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 6 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 6 |
Tech Consultant and Small Business Entrepreneur (Miami, FL)
Age: 36 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The policy sounds beneficial for gaining deeper insights into funding opportunities.
- Sees some prospects for growth but not an immediate impact.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
E-commerce Fashion Retailer (Denver, CO)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 8/20
Statement of Opinion:
- Feels the policy could demystify the process of getting capital investment.
- Wants reassurance on credibility and accessibility of crowdfunding.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 6 |
Owner of a Small Organic Grocery Store (Seattle, WA)
Age: 34 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 7/20
Statement of Opinion:
- Welcomes more structured support on understanding financing.
- Previously hesitated to seek capital due to lack of knowledge, policy might change that.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $3000000 (Low: $2500000, High: $5000000)
Year 3: $3100000 (Low: $2500000, High: $5000000)
Year 5: $3200000 (Low: $2600000, High: $5100000)
Year 10: $3500000 (Low: $2700000, High: $5300000)
Year 100: $5000000 (Low: $4000000, High: $8000000)
Key Considerations
- The effectiveness of information dissemination by the SBA will significantly influence the policy's success.
- Support from local business chambers and industry groups could amplify the bill's impact.
- The regulatory environment surrounding securities offerings may evolve, necessitating regular updates to resources.