The U.S. Small Business Administration announced Tuesday the launching of two programs — the 2017 InnovateHER: Innovating for Women Business Challenge and the Aspire Challenge, a prize competition of up to $1.2 million to expand access to entrepreneurial education and microloans for formerly incarcerated individuals.
The InnovateHER initiative is a nationwide business competition to drive attention and resources to innovative products and services that make our lives easier and longer. Competitors vie for $70,000 in prize money provided to SBA for the InnovateHER competition through a gift from the Sara Blakely Foundation.
“At SBA we continue our efforts to expand the InnovateHER Challenge, focusing on empowering more women in the investment and innovation space in Puerto Rico and the U.S. Virgin Islands,” said SBA District Director Yvette T. Collazo.
“SBA guaranteed loans and technical assistance to women have continued to increase over the years. It is now time for them to benefit from investing in research and inventions that impact their lives and their communities,” Collazo said.
The return of SBA’s InnovateHER Business Challenge “presents an exciting opportunity for some of our nation’s foremost entrepreneurs and innovators,” said SBA Administrator María Contreras-Sweet.
“Women represent half of the U.S. workforce and control 80 percent of the nation’s purchasing power, but still make up less than five percent of venture capitalists,” she said.
The number of women venture capital partners has dropped from 10 percent in 1999 to just six percent in 2014, a trend directly correlated to women’s access to capital; only about seven percent of venture capital funding in the United States currently goes to women-owned ventures.
Gender bias is well documented in this area: a Harvard Business School study asked potential investors to rate a series of pitches, some of which were narrated by women and some by men. Even when the scripts were exactly the same, only 32 percent of people said they would fund the woman, compared to 68 percent who said they would fund the man.
The InnovateHER program is in its third year and officially kicks off in winter of 2017 with local competitions to be hosted by universities, accelerators, clusters, scale-up communities, SBA resource partners, and other economic development organizations.
Entrepreneurs selected as winners in local competitions will advance to the semi-final round. From the pool of semi-finalists, SBA will select up to 10 finalists who will be invited to the National InnovateHER: Innovating for Women Business Challenge to be held in mid-2017.
The finalists will pitch their products and ideas to a panel of expert judges and compete for the top three awards along with $70,000 in prizes.
Meanwhile, the Aspire Challenge for Entrepreneurship Training and Microloans will make up to 16 awards of $75,000 to organizations across the nation to assist in delivering entrepreneurial training and microloan assistance to formerly incarcerated individuals.
The Aspire Challenge will build on the momentum of the Aspire Entrepreneurship Initiative, a public-private partnership announced in August 2016 between the SBA, W.K. Kellogg Foundation, and microlender Justine PETERSEN.
The pilot initiative connects formerly incarcerated individuals to entrepreneurial training, education and microloans, with a specific focus on those who are parents.
“The Aspire Challenge can help increase job opportunities for previously incarcerated men and women in Puerto Rico and the U.S. Virgin Islands that are looking to improve their families’ quality of lives,” said Collazo.
“By gaining access to educational and financial resources they can begin the journey to entrepreneurship and self-sufficiency,” she said.
With approximately 60 percent of formerly incarcerated individuals remaining unemployed one year after release, self-employment must be seen as a viable alternative. The Aspire Challenge will leverage entrepreneurship as a tool to increase economic mobility for returning citizens through intensive entrepreneurial training and counseling and increased access to micro-loans.
The competition will award prizes to entrepreneurial support organizations that propose innovative solutions to equipping returning citizens with the tools they need to succeed in entrepreneurship. Components by which the submissions will be assessed include recruitment methods, education/training delivery, provision of mentoring services, community connections and ways in which participants will be connected to access to capital and financial literacy.
The SBA will award the prizes to organizations through the online competition platform, www.challenge.gov.