Today, President Obama is hosting the White House's first ever Demo Day, casting a spotlight on inclusive entrepreneurship and the importance of diversity in our economy. Startup founders from diverse walks of life and from across the country will come to the White House to showcase their innovations, products and business models. We need all the talent America can muster to keep pace with a business world moving at hyper-speed. The good news is that the Small Business Administration stands ready with an arsenal of programs to support that talent in every way possible.
America's greatest innovators come from all states, not just from Silicon Valley. They can be students in Boise, a farmer in McMullen or a single parent in Anchorage. Unfortunately, securing the resources they need is often a daunting task, whether those resources are mentorship, funding or access to markets. Of all firms pitching to angel funders last year, only seven percent were minority-owned. America can reach its full potential only when we leverage the country's full and diverse talents.
On Demo Day, the SBA is announcing several initiatives aimed at expanding entrepreneurship. Recognizing there is no silver bullet to success, the SBA is offering initiatives that address three prevalent issues for underserved entrepreneurs: streamlining the permitting process, accessing capital and providing mentorship. In combination with the SBA's core program offerings, these initiatives provide the essential underpinnings for success.
Start Up In a Day: The cumbersome registration process for licenses and permits is a persistent challenge in the entrepreneurial ecosystem. New business formation in the United States is experiencing a decades-long decline. Entrepreneurs cite state and local red tape as a chief obstacle. A recent study by the World Bank ranked the United States 46th in ease of starting a business.
As technology improves rapidly, this challenge presents an opportunity to increase the efficiency of navigating regulations. This allows business owners -- particularly minority and women owners -- to setup shop more quickly and easily. As a part of Demo Day, the SBA will announce awards of $50,000 to 28 winning cities and Native American communities of our Startup-in-a-Day initiative. Startup-in-a-Day encourages cities and Native American communities to take a pledge stating that they will work to make it easier than ever for entrepreneurs to start a business. This pledge includes developing online tools to allow more of America's entrepreneurs to apply for all permits and manage the application process from a single online interface. SBA will also announce a single prize of $250,000 to a city or Native American community that wishes to create a replicable "open source" solution.
Growth Accelerator Fund Competition: With greater ease of starting a business comes a greater need for mentorship and capital. The goal of the Growth Accelerator Fund Competition is to get an extra infusion of capital to qualified accelerators, also known as incubators. Supporting these accelerators will boost the startup communities around them. The competition fund, which started last year with $2.5 million and has now grown to $4 million in appropriated funds, supports the growth of accelerators, which serve a particular purpose in filling geographic gaps and serving women or other underrepresented groups.
2016 InnovateHER: Innovating for Women Business Challenge and Summit: The need for mentorship and capital is felt especially in the female entrepreneurial community. Women have 80 percent of the purchasing power in this country. Yet of all the firms receiving venture capital, women lead only three percent. And women represent only six percent of partners at venture capital firms. Even with smarter registration processes and more robust incubators, there is a dearth of capital available to female entrepreneurs. This curbs the talent and solutions these talented women can offer to their communities.
InnovateHer engages entrepreneurs across the country whose products and services impact and empower the lives of women and their families. The InnovateHer program gives women entrepreneurs the opportunity to participate in local business competitions and hackathons, culminating in a national competition in March during Women's History Month. This year the SBA will expand the InnovateHER Women's Business Challenge with a goal of doubling the number of local competitions and the prize money awarded.
Research shows that gender diversity not only benefits women themselves, but also their business counterparts. A 2014 report by Credit Suisse Research Institute, which tracked over 3,000 companies across 40 countries, linked companies with more women to higher returns on equity, higher valuations and higher payout ratios. Advocating for women benefits the entire economy.
The SBA is proud to be a partner with the White House for Demo Day. It is a chance for us to reaffirm our commitment to every American entrepreneur. If you are looking for relevant resources to pursue your dream, the SBA, yes, your Federal government, is here and can be your answer.
We look forward to celebrating every American innovator and leveraging the full range of America's talents.
Diversity in Entrepreneurship and Innovation in the Spotlight at White House Today
America's greatest innovators come from all states, not just from Silicon Valley. They can be students in Boise, a farmer in McMullen or a single parent in Anchorage. Unfortunately, securing the resources they need is often a daunting task.
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