A Holistic, accessible, and innovative approach to capital
Capital remains among the most impactful ways to strengthen access to entrepreneurship. Today, at least 83% of entrepreneurs do not access bank loans or venture capital when launching a business. The ongoing impact of past discriminatory policies, such as redlining, must be countered and new investments made to ensure we are supporting entrepreneurs of color as well as women and rural Americans who have less access to funding in the private market. When business owners do not have access to personal funds or quality capital, they are less able to take the risks necessary to grow their businesses, artificially stifling the marketplace.
RESOURCE: The Kauffman Foundation’s Capital Access Lab is a national pilot initiative that aims to find, promote, and scale innovative investment managers, providing new kinds of capital to underserved entrepreneurs and communities. It is informed by findings outlined in the 2021 report “Access to Capital for Entrepreneurs: Removing Barriers.”
What can government do?
- Level the Economic Playing Field for Future Entrepreneurs
- Make a National Commitment to Expanding Access to Capital for All Entrepreneurs
- Invest in Local Financial Institutions
- Develop Non-Debt Entrepreneurial Capital Catalyst Grants
- Promote Online Tools to Drive Equitable Alternative Funding Opportunities
- Protect Entrepreneurs Through Truth-in-Lending Laws