Maria Contreras-Sweet, the leader of the U.S. Small Business Administration, delivered her “State of Entrepreneurship” address at the Nasdaq stock exchange Friday afternoon.
Contreras-Sweet wanted to make sure investors heard her message loud and clear: invest in new places and new people.
“I don’t think small business owners are given the respect they’re due,” Contreras-Sweet told Coins2Day. “I want to challenge institutions and investors to think harder about the role that entrepreneurship plays for them and their bottom line as well as for society.”
Before she became the administrator of the SBA in 2014, Contreras-Sweet worked in the private sector. She started a venture capital firm that made investments in small businesses. Under her leadership, SBA loans to women have risen 42% and loans to minorities have increased 36%. And there’s a lot of good news for the economy – unemployment is down, job creation is up and VC investment is through the roof.
“We cannot take that for granted,” Contreras-Sweet said. “There are so many dynamic events in our country and in our global economy that could undercut that momentum.”
U.S. Small business confidence fell in January to its lowest level since February 2014. Overall commercial lending has not yet returned to pre-recession levels. In her Nasdaq speech, Contreras-Sweet called for investors to diversify their portfolios – and their perspectives.
“As you look at VC capital, which is part of the fuel that drives innovation, we see that two-thirds of it is coming from three states and only going to 25 zip codes,” she said. “We have to make certain that we’re reaching to rural communities, reaching to women, and reaching to diverse populations.”
Originally from Mexico, Contreras-Sweet says diversity is crucial because for many communities, entrepreneurship is the path forward. About 1% of venture-capital backed startups are led by African-Americans, according to a White House fact sheet.
“Only 1% of VC capital flows to Hispanic or black entrepreneurs,” Contreras-Sweet said. “Does anyone honestly believe these communities are the source of just 1% of our best business ideas?”