NCT Ventures, NMSDC and Rochester Institute of Technology Release National Survey Findings on Access to Capital for Minority Business Enterprises
Identifies Barriers and Develops Solutions to Promote High Growth Diverse Entrepreneurship
COLUMBUS, Ohio (December 3, 2015) - NCT Ventures conducted a National Survey that illuminates issues of Access to Capital among Minority Business Enterprises (MBEs) that was released by the National Minority Supplier Diversity Council (NMSDC). The Survey examines MBEs and “focuses on the internal factors, those within a minority firm’s control, which may hamper their ability to obtain critical growth or acquisition capital.” Education is key, the Survey finds, to improving access to capital, along with more opportunities for networking between capital providers and minority entrepreneurs.
“Given the critical role that institutional capital plays in shaping the US economy, improving diversity among venture backed companies is essential to economic development efforts. Moreover, investing in underserved markets is an opportunity to generate superior ROI,” stated Calvin Cooper, an associate of NCT Ventures who developed and co-authored the study. “Over $100 billion is spent by America’s leading corporations with MBE vendors and yet there is little to no visibility to institutional capital for many of these entrepreneurs. There is an inefficiency in the market. Our goal is to identify the barriers and find solutions to address this problem.”
According to the Survey findings, internal factors among MBEs that contribute to lack of access to venture and other forms of institutional capital include: the lack of growth-oriented succession planning for owners; lack of knowledge about sources of capital, combined with a lack of engagement by owners seeking funding alternatives beyond banks; and a negative perception of venture capital. MBE certification requirements may also inhibit owners from seeking institutional funding that is likely to make their businesses ineligible for certification.
Among the Survey’s recommendations are online and on-site education promoted by networks such as NMSDC to teach MBEs best practices for fundraising, entrepreneurship in high-growth sectors, and better understanding of all types of financial tools, fostering an “overall level of financial sophistication to be able to interact in a substantive way with various fund managers.” The Survey also concludes that relationships need to be significantly improved between networks of MBEs, such as NMSDC, and networks of investors.
"Our National Survey on Access to Capital highlights the need for initiatives, such as that announced in August by the Obama Administration and the National Venture Capital Association, to create a more inclusive environment for minority-owned business enterprises to identify and obtain capital funding,” said Joset Wright-Lacy, president of NMSDC. “We offer programs designed to provide tools and skills to educate minority business owners in the means and best practices of raising capital. The NMSDC network includes investors and financiers who are very interested in investing in our certified MBE firms.”
The National Survey on Access to Capital among Minority Business Enterprises was conducted in early 2015, using a representative sample of the population of interest - in this case, minority business enterprises certified by NMSDC. To review the Survey, please click the following link: NMSDC National Survey on Access to Capital among Minority Business Enterprises.
About NCT Ventures
NCT Ventures is an early stage venture capital firm dedicated to helping entrepreneurs build great companies. In addition to investment capital, NCT provides a platform for entrepreneurs to succeed in turning their ideas into profitable business models through hands-on operational support. Over the past decade, NCT’s team has helped build many successful companies in the Midwest by investing in entrepreneurs with disruptive business models that create greater efficiency in focus market sectors. For more information visit, http://www.nctventures.com/.
The National Minority Supplier Development Council advances business opportunities for certified Asian, Black, Hispanic and Native American business enterprises and connects them to its corporate members. One of the country's leading corporate membership organizations, NMSDC was chartered in 1972 to provide increased procurement and business opportunities for minority businesses of all sizes.
The NMSDC Network includes a national office in New York and 24 affiliate councils across the country. There are nearly 1,800 corporate members throughout the network, including America’s top publicly-owned, privately-owned and foreign-owned companies as well as universities, hospitals and other buying institutions. The affiliate councils certify and match nearly 12,000 minority-owned businesses with member corporations that want to purchase their products, services and solutions.
For more information about NMSDC, visit the website at www.NMSDC.org.
About Rochester Institute of Technology (RIT) Saunders College of Business
Founded in 1829, Rochester Institute of Technology (RIT) is a privately endowed, coeducational university with nine colleges emphasizing career education and experiential learning. Located in Rochester, New York, RIT also has international campuses in Eastern Europe and Dubai. The Saunders College of Business is one of the smallest of the top business programs in the country and is accredited by the Association to Advance Collegiate Schools of Business International (AACSB). Its undergraduate entrepreneurship program is ranked #21 by Bloomberg BusinessWeek and its Masters of Science in Entrepreneurship and Innovative Ventures program is ranked #33 by Eduniversial. For more information about RIT visit saunders.rit.edu/about/recognition.php
Founded in 2005, Coalescence is the premier solutions provider to the Food and Healthcare sectors. Coalescence partners with customers from ideation to commercialization with a commitment to ethical sourcing, talent development, and environmental sustainability to address global health concerns. In addition to co-founding Coalescence, Ian Blount, Ph.D. is a published scholar and regularly partners with universities and institutions to conduct academic research on minority entrepreneurship. For more information about Coalescence visit www.coalescencellc.com
Associate, NCT Ventures