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WASHINGTON – Today, the House Small Business Subcommittee on Economic Growth, Tax, and Capital Access, led by Ranking Member LaMonica McIver (D-NJ), held a hearing examining how private investment—including venture capital, private credit, and the SBA’s Small Business Investment Company (SBIC) program—is shaping the small business economy.

During the hearing, McIver emphasized the need for strong oversight and greater inclusion in the private investment space.

“Private funds—like private equity, private credit, and venture funds—have become a critical component of our small business financing ecosystem, particularly those businesses that need retooling or [are] just on the cusp of growth,” said McIver. “But these funds can also present significant risks for small businesses, their employees, and their communities.”

The SBIC program, a key tool within the SBA, has delivered more than $130 billion to small businesses since its creation. In FY2024 alone, it supported more than 1,100 companies with $7.2 billion in financing. Under the Biden-Harris Administration, recent reforms have created new tools—like the Accrual and Reinvestor SBICs—to help reach underserved communities and regions.

McIver underscored the urgency of addressing longstanding disparities in access to capital.

“Black and Hispanic female entrepreneurs received less than one percent of all venture capital investments in 2020. That must change,” McIver said. “Investing in all of America’s small businesses and startups benefits not only those businesses, but the communities they serve and our entire nation’s GDP.”

The committee also heard from Senofer Mendoza, Founder and General Partner at Mendoza Ventures, who called attention to the shrinking number of small investment funds and the increasing dominance of large, coastal firms.

“Small funds enable Main Street in a way the megafunds do not, larger funds cannot write smaller checks, they just have too much capital to deploy in a typical four or five year investment cycle. We need more small and emerging fund managers to deploy to the seed and early growth stages to sustain an innovation economy.”

The hearing underscored the importance of ensuring that private investment markets work for all small businesses—not just the few with existing networks or access to major financial hubs.

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