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99–714 2016

SBA MANAGEMENT REVIEW: OVERSIGHT OF SBA’S 

ENTREPRENEURIAL DEVELOPMENT OFFICES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ECONOMIC GROWTH, TAX AND 

CAPITAL ACCESS 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

FEBRUARY 2, 2016 

Small Business Committee Document Number 114–039 

Available via the GPO Website: www.fdsys.gov 

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Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

CHRIS GIBSON, New York 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

CARLOS CURBELO, Florida 

MIKE BOST, Illinois 

CRESENT HARDY, Nevada 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

YVETTE CLARK, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRENDA LAWRENCE, Michigan 

ALMA ADAMS, North Carolina 

SETH MOULTON, Massachusetts 

MARK TAKAI, Hawaii 

KEVIN FITZPATRICK, Staff Director 

EMILY MURPHY, Deputy Staff Director for Policy 

JAN OLIVER, Deputy Staff Director for Operation 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Tim Huelskamp .............................................................................................. 1 

Hon. Judy Chu ......................................................................................................... 2 

WITNESSES 

Ms. Tameka Montgomery, Associate Administrator, Office of Entrepreneurial 

Development, Small Business Administration, Washington, DC .................... 3 

Ms. Barb Carson, Associate Administrator, Office of Veterans Business Development, Small Business Administration, Washington, DC .............................. 5 

APPENDIX 

Prepared Statements: 

Ms. Tameka Montgomery, Associate Administrator, Office of Entrepreneurial Development, Small Business Administration, Washington, DC 20 

Ms. Barb Carson, Associate Administrator, Office of Veterans Business 

Development, Small Business Administration, Washington, DC ............. 25 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

Ken Yancey, Chief Executive Officer, SCORE Association ........................... 28 

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(1) 

SBA MANAGEMENT REVIEW: OVERSIGHT OF 

SBA’S ENTREPRENEURIAL DEVELOPMENT 

OFFICES 

TUESDAY, FEBRUARY 2, 2016 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON ECONOMIC GROWTH, TAX AND

CAPITAL ACCESS, 

Washington, DC. 

The subcommittee met, pursuant to call, at 11:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Tim Huelskamp [chairman of the subcommittee] presiding. 

Present: Representatives Huelskamp, Brat, Radewagen, Kelly, 

Chu, Hahn, Payne, and Clarke. 

Chairman HUELSKAMP. Good morning. Thank you all for being 

with us today. I call this hearing to order. 

On this Subcommittee, we understand that small businesses are 

instrumental in strengthening our economy and restoring economic 

prosperity. Given the importance of small businesses, the Small 

Business Administration has been given the noble mission of aiding 

and counseling our entrepreneurs as they seek to start or grow 

their company. Because small businesses are the lifeblood of the 

local economy and my home district, Kansas’s ‘‘Big First,’’ I want 

to stress how important this mission is and note as chairman of 

this Subcommittee, I look forward to working with my colleagues 

on both sides of the aisle and the SBA moving forward. 

Last month, we began a series of hearings to examine the SBA’s 

management deficiencies within various offices, and today’s hearing will focus on the Office of Entrepreneurial Development and 

the Office of Veterans’ Business Development. Together, these two 

offices are primarily responsible for the entrepreneurial development programs meant to propel our small businesses. These efforts 

include statutorily authorized programs, such as Small Business 

Development Centers. I believe we have some representatives here 

from those entities, SCORE, Women’s Business Centers, and Veterans’ Business Outreach Centers. In addition, these offices also 

oversee a plethora of SBA-created initiatives, including regional 

clusters, Boots to Business, and entrepreneurial education. 

The necessity of unauthorized SBA-created initiatives has frequently been questioned on a bipartisan basis by this Committee. 

In the wake of the recent GAO report detailing SBA’s management 

challenges, I am concerned that SBA is continuing to prioritize its 

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2 

wish list rather than ensuring taxpayer dollars are carefully spent 

on programs with proven performance records. 

Today we will hear from both the associated administrators of 

both these offices as they outline their resource management. This 

will allow us to examine how changes within these offices can ensure the SBA is effective in helping small firms without wasting 

Federal funds on duplicative programs. 

Thank you ladies for both being here, and I will now yield to the 

ranking member for her opening remarks. 

Ms. CHU. Thank you, Mr. Chair. 

One of the most vital roles performed by Small Business Administration offices is providing aspiring entrepreneurs and existing 

businesses with valuable counseling and other technical assistance. 

The agency’s portfolio of entrepreneurial development can provide 

critical resources to entrepreneurs in this regard. Whether it is creating a business plan, advice for navigating the procurement process, help marketing a new product, assistance with international 

trade or any other myriad of topics, the SBA’s entrepreneurial development programs can be invaluable for many small firms. It is 

so important these initiatives are functioning at their best to provide the highest quality of resources and services to small businesses across the country. The cornerstone of these programs is the 

agency’s network of Small Business Development Centers, or 

SBDCs, spread throughout the nation. SBDCs offer small businesses with a broad range of entrepreneurial development services. 

Sixty-three lead centers manage 900 outreach locations throughout 

the country. SBDCs are located at colleges, universities, chambers 

of commerce, and local economic development corporations, allowing them to harness local community resources. 

In a single year, small business development centers have helped 

13,400 entrepreneurs launch new businesses, an average of 36 new 

businesses per day. 194,000 businesses received advice from SBDC, 

while 290,000 participants attended training sessions. In my district, we are fortunate enough to have two of these amazing centers 

servicing the San Gabriel Valley of Southern California. Clearly, 

SBDCs are leaving their mark as a vital part of our nation’s entrepreneurial ecosystem. 

The SBA has also established efforts to connect young entrepreneurs with more experienced business men and women. The 

Service Corps of Retired Executives program, or SCORE, uses a 

network of volunteers to provide time, mentoring, and expertise as 

business counselors. Traditionally, retired former executives have 

provided most volunteer counseling services, but there has been a 

recent trend towards diversification within this program. Lately, 

involvement from young business owners has greatly increased, 

and I am hopeful that this trend strengthens the program for the 

future. 

Small businesses are diverse as the makeup of our nation. As 

such, many of the SBA’s counseling initiatives are targeted toward 

specific demographic groups in our entrepreneurial community. For 

instance, there are over 100 women business centers spread 

throughout the country. In 2014, the centers reached 130,000 clients and helped 700 new businesses get up and running. It is critical that this program remains robust and continues to flourish. 

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Even though female entrepreneurship is on the rise, there remains significant gaps between men and women-owned businesses. 

One recent study found businesses owned by men averaged 726,000 

in receipts, versus 239,000 for women-owned firms. As more women 

turn to entrepreneurship as a career path, it is critical that this 

initiative remains in place to close gaps like this. 

Similarly, there are a number of SBA programs targeted to veterans. Most notably, the Veterans’ Business Outreach Centers. 

78,000 of our veterans tapped into this initiative in a single year. 

As our brave service members separate from service and look to 

launch new enterprises, the VBOC, along with Boots to Business 

and other veteran-oriented initiatives, can provide an important 

boost. With all of these programs, it is vital that taxpayer resources 

are being used to their maximum effect for our entrepreneurs. 

In its recent management review, the Government Accountability 

Office mad recommendations for process improvements at the SBA, 

including with the entrepreneurial development initiatives. I hope 

to hear today how SBA is making progress in that regard. 

I look forward to learning about the work SBA is doing to ensure 

all of these programs can be most impactful in connecting businesses in our communities with valuable resources. Entrepreneurs 

deserve all the help that they can get at SBA, and it can be instrumental in meeting that need. 

I would like to thank the witnesses for being here and offering 

their insight, and I yield back. 

Chairman HUELSKAMP. Thank you, Ranking Member Chu, for 

your opening statement. 

If Committee members have an opening statement prepared, I 

ask that they be submitted for the record. 

And for our witnesses, I would like to take a moment to explain 

the timing lights for you. You will each have 5 minutes to deliver 

your testimony. The light will start out as green. When you have 

1 minute remaining, the light will turn yellow. Finally, at the end 

of your 5 minutes, it will turn red. Please try to adhere to that 

limit. 

And so with that, our first witness is Tameka Montgomery. 

Thank you for being here. The associate administrator for Entrepreneur Development within the Office of Entrepreneurial Development at the SBA. In this capacity, Ms. Montgomery is responsible 

for overseeing SBA’s counseling and training programs for entrepreneurs. I appreciate you being with us today, and you may begin. 

STATEMENTS OF TAMEKA MONTGOMERY, ASSOCIATE ADMINISTRATOR, OFFICE OF ENTREPRENEURIAL DEVELOPMENT, 

SMALL BUSINESS ADMINISTRATION; BARB CARSON, ASSOCIATE ADMINISTRATOR, OFFICE OF VETERANS’ BUSINESS 

DEVELOPMENT, SMALL BUSINESS ADMINISTRATION 

STATEMENT OF TAMEKA MONTGOMERY 

Ms. MONTGOMERY. Thank you, Chairman Huelskamp, Ranking Member Chu, and members of the Subcommittee. Thank you 

for inviting me to testify before you today. I am excited to share 

with you the important work of the Office of Entrepreneurial Development, which is responsible for programmatic oversight of the 

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Small Business Development Centers, Women’s Business Centers, 

SCORE program, as well as other targeted initiatives, such as 

Emerging Leaders, Regional Innovation Clusters, the Learning 

Center, and Scale Up America. 

As a former SBDC center director, I would counsel my clients 

that they could not be all things to all people. However, in OED, 

we must meet the varying needs of America’s entrepreneurial community. The diversity of our programs is reflective of this aim. 

Each program has a unique value and plays a key role in the entrepreneurial ecosystem. 

America’s business landscape is changing. Women-owned businesses have grown at a rate of four times that of male-owned; however, 90 percent of their companies do not have a single paid employee and their average annual gross receipts are $144,000, compared to businesses owned by men which generate $638,000. More 

concerning is that businesses owned by black and Hispanic women 

generate on average $28,000 and $53,000, respectively. 

Our Women’s Business Centers serve a unique purpose by providing services that address the challenges of women entrepreneurs. Unlike any of our other programs, the WBC’s core mission includes empowering low to moderate income women to become entrepreneurs. Currently, SBA manages 108,000 Women’s 

Business Centers that train and counsel over 140,000 clients annually. 

SCORE, our office’s longest standing program, has been providing mentorship to business owners for more than 50 years. 

SCORE is powered by a core of 11,000 volunteer mentors who play 

a critical role in helping to fill knowledge gaps that entrepreneurs 

encounter as they start and grow their businesses. SCORE volunteers offered more than 2 million hours to 349,000 clients last year. 

The SBDC program is our largest program with a footprint of 

more than 900 centers across the nation. SBDCs are uniquely suited to deliver long-term advising through ongoing one-on-one business services tailored to the needs of the business owner. SBDC’s 

business advisors helped clients start more than 13,000 new businesses and provided training and advising to more than 450,000 

entrepreneurs. SBDCs are also helping to advance the nation’s 

trade agenda by helping small businesses access the global market. 

Observing a need to help underserved and underrepresented entrepreneurs scale up their businesses, we launched Scale Up America, to fill a gap of business assistance to smaller growth-oriented 

entrepreneurs. Although women and minorities represent the fastest growing segment of new entrepreneurs, their ventures are experiencing far less success. Data from the Census Bureau shows that 

minority-owned businesses generate on average $174,000 in gross 

receipts, compared to nonminority-owned firms, which generate 

552,000 in average gross receipts. The goal of Scale Up America is 

to equip more high-potential, growth-oriented entrepreneurs with 

the right tools to overcome barriers to growth. 

Small businesses drive innovation and play a critical role in local 

economic development. Our Regional Innovation Clusters connect 

businesses, suppliers, service providers and related institutions 

within a defined cluster. Currently, we fund 14 clusters, such as an 

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autonomous and unmanned systems cluster, a bioscience and technology cluster, and a smart grid cluster. 

While it is important that we are responsive to the changing 

needs of entrepreneurs, we also want to make sure that our programs are producing their intended outcomes. We have worked 

closely with our partners, the SBDCs, WBCs, and SCORE, to implement a collaborative evaluation methodology. Our office also 

consulted with the Association of Women’s Business Centers to develop the first-ever survey to capture the outcomes of all WBC 

services. The insights gained from this survey will guide OED in 

our management and oversight of the WBC program. 

Additionally, we have embarked on the agency’s first-ever economic impact evaluation piloted with the Scale Up initiative. The 

findings will be used to improve the effectiveness of this initiative, 

as well as provide us with a model that we will evaluate other programs. 

Thank you for the opportunity to testify before you today. I look 

forward to answering any questions. 

Chairman HUELSKAMP. Thank you, Ms. Montgomery. I appreciate your testimony. 

Our final witness is Barb Carson, the associate administrator for 

the Office of Veterans’ Business Development within the SBA. In 

this capacity, Ms. Carson is responsible for all programs and policies related to veteran entrepreneurs. She is also currently a colonel in the U.S. Air Force Reserve. Thank you for your service. And 

thank you for being here today, and you may begin. 

STATEMENT OF BARB CARSON 

Ms. CARSON. Good morning, Chairman Huelskamp, Ranking 

Member Chu, and distinguished members of the Subcommittee. 

Thank you very much for the opportunity to testify today on the 

U.S. Small Business Administration’s continuing efforts to empower veteran entrepreneurship and small business ownership 

through programs and policies that maximize the availability of 

SBA services for veterans, service members, and their spouses. Our 

programs and policies target our nation’s heroes and job creators. 

We are grateful for the continued support of the House Small Business Committee and this Subcommittee. We look forward to sharing our successes with you and addressing your questions. 

As small business owners, veterans continue to serve our country 

by creating critical employment opportunities and driving economic 

growth. They possess the skills, discipline, and leadership to start 

and operate successful businesses in their communities. Nearly 1 

in 10 small businesses is currently veteran owned. Remarkably, although the overall number of veterans declined significantly between 2007 and 2012, the participation of veterans in business 

ownership was persistent. This is according to the 2012 census survey of business owners. During that period, the overall number of 

veteran-owned firms increased at a faster rate than nonveteranowned firms. We also note that between 2007 and 2012, the number of women veteran-owned firms increased by nearly 300 percent. 

All of this data may indicate strong entrepreneurial activity among 

post-9/11 era veterans. 

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My office is strongly encouraged by these trends in veteran entrepreneurship and is fully engaged in supporting them with quality programs and thoughtful policy initiatives that all cover SBA’s 

primary missionaries of counseling and training, access to capital, 

and access to contracting opportunities. 

In Fiscal Year 2015, over 60,000 veterans received training and 

counseling from SBA’s 15 Veterans’ Business Outreach Centers. A 

prominent and enduring focus of the VBOC program is providing 

transition assistance services via SBA’s administration of the entrepreneurship track of the Department of Defense Transition Assistance Program (TAP), which we call Boots to Business. Working 

through the interagency governance of TAP, and with our partner 

support, we were able to deliver Boots to Business to over 14,000 

service members and their spouses in Fiscal Year 2015, and over 

35,000 have been trained since the program’s launch in January of 

2013. Through an efficient and effective cooperative agreement 

with the Institute for Veterans and Military Families at Syracuse 

University, we provide these services to those service members who 

are disadvantaged by having to transition from an overseas installation. 

This year we reached several program milestones. First, we increased the percentage of modules being taught by VBOCs. Second, 

we implemented a Boots to Business specific outcomes assessment 

survey to determine the number and rate of business formation 

among the participants and get their feedback on the quality and 

future service needs. And third, we implemented an outreach campaign to increase the awareness and participation of military 

spouses as well as service members who seek to prepare for transition earlier in their careers as part of the Military Lifecycle Model. 

Working with Congress and our partners, we are proud now to 

offer Boots to Business to veterans of any era and their families 

with a program extension that we call Boots to Business Reboot. 

SBA also supports comprehensive entrepreneurial development 

programs specifically designed for women, veterans, and for service-disabled veterans. Over 65 percent of the graduates of these 

programs have started their own businesses. 

In Fiscal Year 2015, SBA will sustain the SBA Veterans’ Advantage program and waive fees for veterans and their families who 

qualify for SBA Express 7(a) guaranteed loans of $350,000 and 

below, and reduce fees by half for SBA 7(a) guaranteed loans between $150,000 and $5 million. 

In 2015, lenders utilized SBA’s 7(a) and 504 loan programs to 

make over 3,300 loans, totaling more than $1.38 billion to veteranowned businesses. That is an 80 percent increase over 2014. In the 

area of Federal contracting, the Federal Government in 2014 again 

exceeded a 3 percent goal for contracting with service-disabled veteran-owned small businesses. This was the third straight year. In 

2016, my office is expanding its engagement strategy to Federal 

agency offices of small and disadvantaged business utilization to 

ensure that service-disabled veteran small business opportunities 

continue to grow. 

My office empowers veteran entrepreneurs who seek Federal procurement opportunities by building their capacity to compete and 

win contracts. SBA, through a cooperative agreement with the 

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Montgomery County Chamber of Commerce Foundation, Veteran 

Institute for Procurement (VIP) is how we do this. VIP is an accelerator-like, in-residence, educational training program for veteranowned businesses, which is instructed by private sector experts, 

government officials, and agency representatives. 

I thank you very much for the opportunity to testify before your 

Committee today. By supporting our work, you are mandating that 

the U.S. Government does all it should to provide American dream 

of business ownership to those who have fought and continue to 

fight every day to protect it. Thank you. 

Chairman HUELSKAMP. Thank you, Ms. Carson, for your testimony, and Ms. Montgomery. And we will begin questions. I first 

yield myself 5 minutes, and I have a number of questions. 

In your testimony, both of you have identified a number of data 

points, certainly plenty of numbers, and performance metrics are 

obviously important for Congress and agencies to evaluate programs, oftentimes competing programs in the same agency. It is 

my understanding that the Entrepreneurial Development Management Information System (EDMIS) is the performance database 

used by the SBA, but the recent upgrade has been essentially a 

failure. This is very troubling to me. First, who is responsible for 

overseeing this contract and getting the system updated? And second, what is the current status of EDMIS and what are the plans 

to update this system? And third, what conversations have you had 

with your resource partners about EDMIS? 

And with that, we will start, I guess, with Ms. Montgomery. If 

you can answer all of the above questions, or whatever you can answer. Then, we will see what Ms. Carson thinks about that. So 

with that, please answer the question. 

Ms. MONTGOMERY. Thank you for your question. 

Yes, EDMIS is our system in which we capture data. Really, it 

is output data from our partners. And so what that means is we 

capture the number of clients that our clients or our resource partners serve. We recognize that EDMIS needs an upgrade. Currently, 

there is not a contract. To answer your second question, currently, 

there is not an existing contract. Previously, there was an existing 

contract, and we recognize that the system that was being developed was not meeting the needs of our agency. And so now what 

we are doing moving forward is that we have brought on someone 

on our team who is solely committed to EDMIS, understanding 

what the challenges are, and then also helping us to identify what 

the correct path forward will be to improve the system and make 

sure that it is a system that is not only effective for SBA in capturing the data that we need, but then also for our resource partners inputting their data. 

Chairman HUELSKAMP. So the upgrade that I discussed that 

had already happened, you abandoned that and are looking at another upgrade, or are trying to actually finish the upgrade; is that 

correct? 

Ms. MONTGOMERY. Correct. Last year is when that particular 

upgrade had ceased. 

Chairman HUELSKAMP. And who was in charge of making the 

upgrade? 

Ms. MONTGOMERY. I was. I was. 

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Chairman HUELSKAMP. And now you have filled a management position that will be directly responsible for this upgrade. 

And how much did you spend on the failed upgrade, and what are 

you anticipating to ask for Congress, how many dollars to do the 

upgrade right this time? 

Ms. MONTGOMERY. Yes. So one of the things that the contract, 

the initial contract, was about a million dollars for the initial upgrade. That contract had been moving forward prior to my moving 

into the role. However, it was clear that, as I said before, the system that was being developed was not going to be effective, and so 

we stopped it so as not to continue to waste government resources. 

As for how it will look moving forward, our tea member is looking 

at the existing system and will offer recommendations on whether 

or not does it require an upgrade to the existing system? Do we 

look to an off-the-shelf system? Do we create a new system? Or 

could it be a combination of those? We do not know yet but we 

have a person on the team who is working on identifying what the 

correct path forward is on EDMIS. 

Chairman HUELSKAMP. And if the upgrade failed, how do you 

compare the performance between obviously the statutorily authorized programs and these other initiatives that have not been approved by Congress, how are you able to say which ones are actually working? 

Ms. MONTGOMERY. Yes. So as I said earlier, EDMIS is a system that captures outputs. It is not an effective system to develop 

or to identify performance metrics or to, excuse me, to evaluate the 

effectiveness of programs. And so what we have done is we have 

been working with a third-party evaluator, and as I mentioned, our 

third-party evaluator has worked with our resource partners to 

come up with common performance metrics. We use the third-party 

evaluator to evaluate our Regional Innovation Clusters programs 

as well. 

Chairman HUELSKAMP. Ms. Montgomery, I am confused. 

Ms. MONTGOMERY. Yes. 

Chairman HUELSKAMP. So you have performance metrics outside the performance metric database, and you use that to evaluate 

the effectiveness of these programs? I am a little confused. So what 

is the purpose of the database? 

Ms. MONTGOMERY. As I said, the database is an effective tool. 

It captures data. So it captures the numbers of clients served, client demographics. 

Chairman HUELSKAMP. Well, I understand that. That is the 

data. The upgrade failed. 

Ms. MONTGOMERY. Yes. 

Chairman HUELSKAMP. You are not apparently capturing the 

data, so how do you evaluate the program if you do not have performance data that you have captured because the upgrade has 

failed? 

Ms. MONTGOMERY. So I think what I have not explained clearly is that we currently have EDMIS and the existing system currently collects that particular data as I mentioned before. What I 

was expressing is that as we look to move forward with EDMIS, 

one of the things that we have to evaluate and determine is that 

how do we look at gathering outcome measures and not just output 

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measures? And so that is where the two things that we are working on. And so we recognize that EDMIS is effective for capturing 

outputs, but it is not the best system as it stands now to capture 

outcomes. And so in the meantime, what we have done is that we 

have worked with our partners and a third-party evaluator to capture more detailed, evaluative impact information from the clients 

of our resource partners so that we can really understand and 

evaluate the outcomes of those clients after they have received 

services. 

Chairman HUELSKAMP. Thank you, Ms. Montgomery. I am out 

of time, but if you would provide the Subcommittee an explanation 

of what the upgrade is for, the data you are missing now, and how 

that will improve your evaluations, because it looks like you wasted 

a million dollars. I think I am still confused what exactly you were 

trying to do, and again, we do have a number of statutory authorized programs that have a long history of working and then you 

have these other initiatives which you spent most of your time 

talking about that I do not see that we had the data to compare 

those. 

So with that, I will yield 5 minutes for the ranking member for 

her questions. Thank you. 

Ms. CHU. Thank you. 

Ms. Montgomery, SBA resource partners, like the SCORE program, the Veterans’ Outreach Center, and the Women’s Business 

Center, provide a variety of services and counseling to small businesses on not only starting a small business but also the SBA programs that are available to them. And while these programs are 

constantly changing, SBA must also provide outreach about programmatic changes. In testimony, this Committee has learned that 

SBA has a way to go to successfully communicate with these partners. What steps is your office taking to increase the communication with SBA’s resource partners? 

Ms. MONTGOMERY. Well, our resource partners are our direct 

grantees, and so as such, our program offices are in constant communications with our grantees, whether they are weekly regular 

calls, for example, on the SBDC side with the state directors, or 

with our WBCs. We also host with all of our resource partners, collaboratively we host quarterly resource partner calls in which we 

bring on the administrator to talk about what things are happening within the agency from a more broader level perspective, 

and we bring in some of the other offices that also come in and 

speak to our resource partners. 

Ms. CHU. Okay. Ms. Montgomery, SBA operates various pilot 

initiative programs, such as the regional clusters and the entrepreneurial education programs that provide training to businesses. Of 

course, we have our statutory programs that were established by 

Congress. But can you tell me what the merits are of the programs 

that are the initiatives not found through the statutory programs? 

Ms. MONTGOMERY. So as you mention, our Regional Innovation Clusters is one such program that we have been providing 

since about 2010, and one of the things that we have found is that 

the businesses that participate and receive assistance in the cluster, that we have seen them secure more patents, that they have 

received the targeted assistance to do commercialization on key 

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products and services. We have seen a higher level of small businesses engage in their local economic clusters in their communities. 

And so additionally, we have a number of our clusters that collaborate with our resource partners to provide potential clients or even 

to assist in sharing assistance, providing technical assistance in 

other ways. 

Ms. CHU. Okay. Ms. Carson, I am a fan of the Boots to Business 

program because I think it provides resources to our veterans at 

a very critical time in their lives. And I know before that there was 

not that on-hands training before soldiers left their assignments 

and went out into the world, but the Boots to Business really corrects that, and they get that training before they leave. 

Now, I understand that this program is funded separately from 

the Veterans’ Business Outreach Centers and is administered by 

various resource partners. With VBOCs having the specific mission 

of aiding our veterans with business training, has your office considered moving the program over to the centers fully? 

Ms. CARSON. Thank you for your question. Through Fiscal Year 

2015, you are correct. The appropriation was in two separate categories—Veterans’ Business Outreach Center and Boots to Business. In Fiscal Year 2016 that will no longer be the case, and so 

we can properly resource as needed. However, there are only 15 

Veterans’ Business Outreach Centers at this time, not nearly 

enough to serve the 160-plus military installations that we are 

serving with Boots to Business around the world, though we are focused, as I said in testimony, that VBOCs need to increase their 

participation in Boots to Business delivery, as that is by statute 

their primary responsibility to serve the transitioning service member. 

Ms. CHU. So what does that mean if you have only 15 VBOCs? 

Ms. CARSON. It means that my goal is to expand the Veterans’ 

Business Outreach Center Program so that they can take a larger 

role across the United States. With the number of installations we 

have, which is over 150, I cannot possibly serve them solely with 

Veterans’ Business Outreach Centers, which is why I am very 

proud that we have grant relationships with SBDC, SCORE, and 

Women’s Business Centers, because of the diversity of that delivery 

model of Boots to Business at installations introduces service members to all the resources that they have in their community. 

Ms. CHU. Do you think it would be more efficient for VBOCs to 

administer the program or would it be more difficult to do so considering the number of installations that there are around the 

world? 

Ms. CARSON. As you said, the number of them within the 

United States makes it impossible at this time to serve solely with 

Veterans’ Business Outreach Centers. And I think there are benefits to the diversity of the delivery among all resource partners. 

That is SBA, and they get an introduction to our full community. 

Ms. CHU. Thank you, and I yield back. 

Chairman HUELSKAMP. Thank you, ranking member. 

Next, I will recognize Representative Kelly for 5 minutes. 

Mr. KELLY. First of all, Ms. Carson, Colonel Carson, thank you 

for your service. I think that citizen soldiers are the backbone of 

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this nation and have been since predating 1776, so thank you for 

your service. 

In August, I had the privilege of attending and operating the 

VBOC at Mississippi State University. At Mississippi University, 

Mississippi State University VBOC website, there are two main 

training programs being advertised—Boots to Business and Veteran Institute for Procurement (VIP). While Boots to Business is 

administered locally, VIP is administered at a centralized location. 

Mississippi State University currently administers veteran entrepreneurial services to Tennessee, Mississippi, Alabama, and Louisiana. Getting our veteran entrepreneurs from Region 4 to the Potomac, Maryland, where the VIP is held is cost prohibitive to many 

of my veterans. 

Ms. Carson, is your office working on a way to bring the VIP program to other places besides Maryland? 

Ms. CARSON. Thank you, sir, for your question. I have explored 

that possibility with the Veteran Institute for Procurement, and 

they have tested it once prior to their cooperative agreement with 

the Small Business Administration. And what they found is that 

most procurement decisions are made here in the Washington area, 

and they found that they could get the greatest participation from 

prime contractors, government officials here in this location. However, I have not closed the door to the idea that we do have some 

other central locations around the United States where we could 

replicate this program, perhaps in a different scale, but it could be 

done. So I have not given up on that opportunity, sir. 

Mr. KELLY. And Ms. Carson, you note in your testimony that in 

Fiscal Year 2015, 60,000 veterans received training and counseling 

from SBA’s 15 VBOC centers. You go on to note that working 

through interagency governments of TAP and with our partner 

support, you are able to deliver Boots to Business to over 14,000 

transitioning service members and military spouses in Fiscal Year 

2015 and over 35,000 since the program’s launch on January 1, 

2013. However, I notice that there is nothing about the success of 

those veteran service members or military spouses after they participate in your program. This Committee and the GAO have noted 

the absence of performance metrics which are very important. 

Measuring the right performance metrics is the only way that you 

identify the right solutions and the right problems to get the solution to. And so why is SBA not tracking outcomes like business 

survivability or sales growth instead of what they are tracking 

now? 

Ms. CARSON. Sir, I will speak specifically to the Boots to Business. I am very proud that over the last 18 months, we have established finally a system of record at SBA so that we can collect veteran data to begin to get that. And also, as I noted in testimony, 

that I have also just been approved to launch an assessment survey 

for Boots to Business participants to understand what their business formation rate is. As you know, this is a new program with 

its first appropriation in 2014, although we did begin to test what 

would be the best practice in 2013. So it is early days, but I am 

very certain that we are on the right track, and I will start to get 

outcomes from that survey next month. 

SBREP-219 with DISTILLER

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Mr. KELLY. And just as a follow-up to that, what specific data 

are you looking to track? 

Ms. CARSON. First, I would like to know was it of use to them? 

The quality of the service is the very first indicator. Second, did it 

help them form a business? Third, I would like to know if they 

were able to better connect with SBA resources once they had had 

this course. It is hard to do without a control group, but I would 

like to say that it makes a difference to know about these resources 

before you are actually back in your community. This is the biggest 

difference between having nothing and having a transition when 

people are making critical decisions about whether they want to go 

to school, they want to get a job, or they would like to create their 

own job. 

Mr. KELLY. And this is more of a statement than a question, 

but you understand that the military and the Veterans’ Business 

Outreach group, they are one of the best organizations, period, 

about not seeing race, color, sex, or anything else. As you and I 

both know from serving, we see green in the Army and you see 

blue in the Air Force. That is the only colors we care about, are 

green and blue. And so these are some of the brightest and smartest and hardworking people, and they understand how to achieve 

objectives when you give them to them. So I would just say make 

sure your data reflects that because if we are not getting success 

out of these folks, we are doing something wrong, because we have 

the right people to achieve that success, so we have to measure the 

right data to make sure that we are providing them what they 

need. 

And I yield back, Mr. Chairman. 

Chairman HUELSKAMP. Thank you, Representative Kelly. 

Next, I recognize Representative Payne for 5 minutes. The floor 

is yours. 

Mr. PAYNE. Thank you, Mr. Chair, and to our ranking member. 

Ms. Montgomery, in your testimony, you mentioned that the 

number of women-owned businesses has grown significantly to bypass the rate of male-owned businesses. However, you note that 

even though women are starting businesses, 90 percent of their 

companies do not have a single paid employees. When I speak to 

my constituents, one of their primary concerns is employment and 

financial prosperity. So can you give us specifics about the unique 

barriers or circumstances that women-owned businesses are facing 

that tend to inhibit them from being able to add employees, and 

what can we do to assist them in this area? 

Ms. MONTGOMERY. Thank you for your question. 

Yes. When we look at women-owned businesses, there are a 

number of challenges that women entrepreneurs have in scaling up 

and growing their businesses. One of the things that we find is 

that sometimes women do not believe that they can access the capital that they need to really grow their business, and we know that 

funding is very important for being able to grow a business. And 

so making sure that they have the right connections to the appropriate lenders, whether they are microlenders or traditional banks, 

is something that we work with business owners on. 

One of the interesting things we talk about with pay and women, 

is the ability to negotiate. That same ability to negotiate also conSBREP-219 with DISTILLER

13 

tinues as it relates to businesses. And so the great thing about 

Women’s Business Centers and understanding kind of some of 

those key challenges, their training and their business assistance 

can really focus around addressing those unique needs of women. 

Mr. PAYNE. Thank you. 

Ms. Carson, also I would like to thank you for your service to 

this nation. We respect it and we appreciate it immensely. 

In your testimony, you also noted that the uptick in womenowned firms stating that between 2007 and 2012, the number of 

women veteran-owned firms increased by nearly 300 percent. Can 

you tell us about any unique barriers that are particular to women 

veteran-owned firms? 

Ms. CARSON. Thank you, sir. It has been a privilege to serve, 

and I look forward to continuing that service. 

I agree with Associate Administrator Montgomery that access to 

capital continues to be a challenge for all women entrepreneurs. I 

do, however, think that this population, they recognize that they 

can negotiate. They have met many challenges head-on, and I 

think they are going to be strong entrepreneurs. They also happen 

over index, for example, in the Boots to Business participation. Although the overall service composition for women is in the high 

teens, we see it is over 20 percent of our courses are women service 

members who want to take Boots to Business. 

Mr. PAYNE. So do you think that their experience in the Armed 

Services and the discipline and the criteria they have to meet in 

terms to serve helps them when they go into starting a business? 

Ms. CARSON. I could not reference a survey, sir, but from personal experience, I absolutely do think that it is the case. 

Mr. PAYNE. Yes. Are there experiences that they have that you 

could lend to women outside of that military experience that allows 

them to be able to negotiate and prosper? 

Ms. CARSON. I think that is a fantastic idea, and I already work 

closely with Erin Andrew of the Office of Women’s Business Ownership to look for ways that our programs can learn from each other 

and also collaborate, and that is a perfect way that we could go forward in the future. Thank you. 

Mr. PAYNE. I think that is excellent. And I will yield back before the red light comes on. 

Chairman HUELSKAMP. Thank you, representative. I appreciate that. 

Next, I will yield 5 minutes to Representative Radewagen, and 

I appreciate keeping on the clock. Thank you. You have 5 minutes. 

Ms. RADEWAGEN. Thank you, Mr. Chairman and Ranking 

Member Chu. I would like to welcome Ms. Montgomery and Colonel Carson as well. And this question is actually for both of you. 

In each of your respective areas, if the funding goes to the unauthorized SBA-created initiatives went instead to the authorized 

programs you oversee, how many more SBDCs, VBOCs, or similar 

Entrepreneurial Assistance Centers could have been opened or expanded instead? 

Ms. MONTGOMERY. Thank you for your question. The programs that I believe you are referring to, for example, our Regional 

Innovation Clusters, for example, those are programs that we 

award through a contract because we do not have grant authority 

SBREP-219 with DISTILLER

14 

for those programs. And so it is full and open competition, and in 

fact, we have a Women’s Business Center in Alabama that runs a 

cluster. On our Scale Up initiative, we have a number of Small 

Business Development Centers that are actually the awardees of 

that particular program, and so they are delivering that service, as 

well as we have some WBCs. But all of our programs, all of our 

resource partners, have the ability or are able to pursue those opportunities with us. There is nothing that prohibits them from 

going after that funding. 

Ms. RADEWAGEN. As a follow-up, could the U.S. territories who 

are underserved by the SBA have been a possible location? 

Ms. MONTGOMERY. Yes. As I mentioned, it is full and open, 

and so we receive applications or proposals from communities, and 

it just depends on where they come from, but it is a full and open 

competition. 

Ms. RADEWAGEN. Colonel Carson, any comments? 

Ms. CARSON. Yes. I want to make sure that I understand the 

question that you asked first. But if you are speaking of programs, 

the unauthorized program perception of Boots to Business, is that 

the one that you would refer to, ma’am? 

Ms. RADEWAGEN. And others, yes. 

Ms. CARSON. And others. Okay. In my case then, we do have 

a statutory responsibility to participate in transition assistance 

programs with the Department of Defense. We do happen to call 

it Boots to Business. I believe that we are really efficiently providing that program at minimum cost, that it would still, even with 

great appropriation, have full and open competition for more veteran outreach centers, but I cannot do it fully in that manner to 

serve the transitioning service member population. But like Associate Administrator Montgomery, I do have fully open and competitive process for grants for those resource partners. 

Ms. RADEWAGEN. Thank you. 

Thank you, Mr. Chairman. I yield back. 

Chairman HUELSKAMP. I would like to recognize Representative Hahn for your 5 minutes. 

Ms. HAHN. Thank you, Mr. Chairman, Ranking Member Chu. 

Thanks for holding this hearing. 

One of the issues that we are grappling with in Los Angeles 

County is veteran homelessness, and we have at the last count, approximately 4,000 to 5,000 homeless veterans in Los Angeles County. Last week, Secretary McDonald of the VA came out to put his 

stamp of approval on a new master plan for the West LA VA Center, which will provide housing to get our veterans off the streets, 

but it is also going to be a place where more resources for the veterans are able to be accessed—health, legal services, addiction 

treatment. But also, there is a portion of that that they are talking 

about the idea of helping veterans become entrepreneurs because 

I think part of the new thinking is it is one thing to get our veterans off the street; it is another thing to prevent further homelessness by helping them start a business. So I think this is the sort 

of model that makes sense really around the country. 

So Colonel Carson, I was going to ask you, SBA has versions of 

this kind of resource hubs in the form of the 15 Veteran Outreach 

Centers across the nation, but apparently, the only center in CaliSBREP-219 with DISTILLER

15 

fornia is up in Sacramento, and the majority of veterans live in 

Southern California, and most of those live in Los Angeles County. 

So since employment and entrepreneurship are other venues to 

prevent homelessness, how can you assure me that the veterans in 

Southern California are getting the training and resources and 

counseling that you are speaking about in these resource centers 

and what is the SBA and the Office of Veterans’ Business Development doing to reach out to the veterans in Southern California? We 

are almost like two states in California—Northern California, 

Southern California. We have the most population in Southern 

California. 

Ms. CARSON. Yes. I recognize that that is a challenge, and in 

not being able to cover ever state as fully as we would hope is a 

gap that I must address, and I continue to do so. So it is a full and 

open competition for Veterans’ Business Outreach Centers, and the 

one in Sacramento was quite competitive. I do share your concern 

that the veterans in Southern California must get the attention 

and service that they deserve. So I do count on Veterans’ Business 

Outreach Centers, all of them, not just in California, to be excellent 

resource integrators, to make sure we know of all the resources 

that are available to veterans both through the SBA district offices 

in Southern California, the resource partners there, and I will also 

say that I am finalizing a plan right now to expand the Veterans’ 

Business Outreach Center network because of an increase in appropriation that is not yet final. 

Ms. HAHN. Do you have a sense that the Southern California 

veterans are accessing the resource center in Sacramento? 

Ms. CARSON. Yes, I do, but I know I can do more, and because 

the Veterans’ Business Outreach Center mission is tied really, the 

focus is on transitioning service members. You also have a high 

number of military installations there, and now I have better data, 

since we have been running the Boots to Business program, to understand the demand, to understand the existing veteran population and how we can better serve it. So I look forward to making 

a lot of progress. 

Ms. HAHN. Thank you. And I do think we have a great opportunity here because certainly for all of us, just the humane response is to get veterans and others off the streets, into shelter, but 

long-term, I think we have a great opportunity, whether it is 

women in minority-owned businesses, veterans-owned. Women veterans is a huge issue, and I think we have a great opportunity to 

transition them into the idea of being an entrepreneur and starting 

their own business, and thus really, you know, dictating the outcome of their own lives. So I think you have a real opportunity, and 

I would like to see you kind of look into this West Los Angeles VA 

Center and see if that might not be something that you could partner with. 

Ms. CARSON. And I would love to tell you if I have just 10 seconds. 

Ms. HAHN. You do. You have 11. Oh, 10 now. 

Ms. CARSON. Oh, good. We are testing a program that integrates SBA resource with VA medical centers. I am testing it on 

the East Coast right now in three different sites to work with the 

VA Medical Center in their Compensated Benefits Therapy ProSBREP-219 with DISTILLER

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gram for Entrepreneurs. Some peer-to-peer veteran mentoring to 

start and launch small businesses, so I am absolutely happy to look 

at the West LA and test it there as well. 

Ms. HAHN. Great. Thank you. 

Ms. CARSON. Thank you. 

Chairman HUELSKAMP. Thanks. I represent Representative 

Brat for 5 minutes. 

Mr. BRAT. Thank you, Chairman. Thank you both for being with 

us today. 

I taught economics for 20 years to college kids, and so I am interested in all this entrepreneur stuff and I am all in favor of it. But 

whenever I see entrepreneur development, I almost get a little 

nervy because Adam Smith is my hero in the invisible hand, and 

so entrepreneurs are supposed to be the ones who have that 

precisability to be able to develop new business, see opportunities, 

take risk, and all that kind of thing. So now that government is 

going to come into play and train entrepreneurs, my radar goes up. 

I am all interested. And so make the best case you can for this. But 

what I really want to know is the Subcommittee is entrepreneur 

development with an arrow going toward economic growth. We are 

not doing so hot. Last quarter was 0.7 percent economic growth. 

And so I think the nation has more fundamental problems, and 

this is what I want to get to with you. The folks you are seeing, 

do you see other gaps that we could do a better job of? And my 

guess is it is K to 12. Right? I have freshmen coming in to my college classes. They do not know what a business is, for real. I have 

seniors going out sometimes that do not know what a business is. 

And then you guys get, and I get, and grad schools get people that 

want to be entrepreneurs; they do not know what a business is. 

And in higher ed, 90 percent of faculty think business is evil. That 

is kind of tongue-in-cheek. Right? But some of my colleagues are 

not in love with business. And so are you seeing any gaps? If we 

want to do the best thing for the people that are coming to you to 

be entrepreneurs, I want them to be entrepreneurs. Right? Business is the only shot that kids have. Right? That is the only shot 

for success. So we all want to make that happen. Are there major 

gaps in skills and resumes that we can do a better job of so that 

when they come to you they are ready to go? And I will just kind 

of set off with that question for both of you, whoever wants to go 

first. 

Ms. MONTGOMERY. Thank you for your question. I think you 

speak to something that is really interesting in that how do we cultivate an entrepreneurial mindset much earlier? And I think that 

that is important, because I think it does. K–12 12 is a great opportunity and a great time to get young people thinking in that way. 

And at SBA, we have been working on reaching out to millennials 

because we know that while millennials are the largest age cohort, 

they are actually starting businesses at a far lower rate than previous generations. And so I do think we have a great opportunity 

to inject and introduce entrepreneurship earlier than even the 

millennials. So there is an opportunity there that could help in the 

long term spur innovation and entrepreneurship here in our nation. 

SBREP-219 with DISTILLER

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Ms. CARSON. Sir, the population that I serve obviously is not 

younger than 18 years old, but there are definitely some benefits 

to veteran experience, and I would say those are assessing risk, 

discipline, and responsibility for one’s actions, and those are essential to running a successful small business. Where I still see room 

for growth is a focus on business finance and personal finance as 

well and recognizing the decisions that one makes as a young adult 

could have serious complications as they try to start and grow a 

business. 

Mr. BRAT. That is good. In turn, anything curriculum-wise, any 

missing gaps? I mean, I tell my students, look, if you love plays 

and the arts and music or whatever, good. Follow your passion. 

Make sure you have got to do that. Right? But minor in accounting. 

Right? You have got to do both. Right? And do some Excel spreadsheets and learn about web design or whatever. Right? And you 

just give them this package. And if they do not have it, they are 

going to be hurting. Any just obvious shortfalls where we have to, 

I mean, you gave some skills analyzing risk and courage. Those are 

great virtues, but they are not sufficient. And so what I am trying 

to get at, what is the minimum in the schools? What can we really 

focus on to fill in some of these gaps? 

Ms. MONTGOMERY. I know that some of our Women’s Business 

Centers, as well as some of our Small Business Development Centers recognize that gap, and they have been engaging from a high 

school perspective, taking young people through a curriculum that 

talks about a more entrepreneurial mindset because the likelihood 

that that young person who is in high school is going to actually 

start a business; rather, how do we help that individual have the 

mindset so that whether or not in the future they choose to start 

a business or they go work for someone, they have an entrepreneurial approach that helps them to be more effective. And in any 

situation, and in the future, when they come to the point of wanting to start a business, they can pull on what they have learned. 

And so I know, like I said, we have WBCs and SBDCs that have 

already begun to provide that type of service through training to 

young people across the nation. 

Mr. BRAT. That is great. I went over time but I was testing you 

both, and I can tell you both actually like business. So thank you 

very much. Very good. 

Chairman HUELSKAMP. Next, I will recognize Representative 

Clarke for 5 minutes. 

Ms. CLARKE. Thank you, Mr. Chairman, and I thank our ranking member. I thank our witnesses here today. 

Ms. Carson, in your testimony, you mentioned the Veteran Institute for Procurement Program, which you note is instructed by private sector experts and government officials. Could you expand a 

bit more on this program, and how long it has been in place, and 

what kinds of successes you have achieved? 

Ms. CARSON. Yes, ma’am. Thank you for your questions. 

I am very proud of this program, VIP. It is, as you said, a Montgomery County Chamber of Commerce foundation, and it has been 

funning for a number of years, but SBA has been involved as a cooperative agreement for just—we are on our second year. So the 

format of the program is it is at no cost to the veteran business. 

SBREP-219 with DISTILLER

18 

It is at a facility for three days. It is intensive. It is 27 hours of 

learning, and 80 percent of the attendees say that they make significant changes to their business practices after they have left the 

program. And the combination of instruction is they are prime contractors who give of their time to give and tell veteran business 

owners what would make them more competitive, the things that 

they are not doing that they could be doing, and what the landscape looks like for procurement, which is why it is central to this 

area where most of those big decisions are made. The agency officials that we bring in, they can be SBA procurement center representatives. They can be independent procurement decision-makers themselves, and they are also leaders like myself, the 8(a) program. So they get a full rounded perspective of everyone who is in 

the procurement landscape. 

Ms. CLARKE. So since your partnership, have you been able to 

sort of chart successes in actually obtaining contracts from individuals who have attended these intensive programs? 

Ms. CARSON. That is at the 1-year point after going to the program. Those members, those participants are surveyed, and we did 

just receive one, so I am happy to provide that to you. 

Ms. CLARKE. Okay. Very well. 

Ms. CARSON. Thank you. 

Ms. CLARKE. Ms. Montgomery, can you discuss a bit more detail 

the initiatives that your office has put in place to expand outreach 

to entrepreneurs, particularly to minority and women-owned businesses in underserved areas? 

Ms. MONTGOMERY. Thank you. I would love to. 

One program, and it is not really a program, but it is an initiative that we recently launched, and we partnered with the National 

Association of Government Guaranteed Lenders, recognizing that 

there are in underserved communities individuals obviously who 

want to start a business but do not know where to go and they do 

not have the relationship necessarily with SBA. They have not 

been introduced to SBA. And so what we have developed in partnership with NAGGL was, or is, called the Business Smart Toolkit. 

And basically, it is a downloadable—it is on our website—workshop 

that provides individuals with the basics around starting a business, how to establish strong banking relationships, and then 

where to connect with the local resources on the ground. And so 

this was done through a co-sponsorship with NAGGL, and the way 

that we have been able to deploy this and get it out into the broader community is by partnering with organizations who have those 

constituencies. So, for example, one of the organizations that we 

have partnered with is—the 100 Black Men of America is one of 

our partners. The National Association of Community Latino Builders is another one of our organizations that we have partnered 

with. So we have tried to partner with faith-based and nonfaithbased community organizations to make them aware of this resource that they can download to host a workshop, and then on 

how they can connect with our SBA district offices and how they 

can connect with a lender to come in and speak to their constituents. 

SBREP-219 with DISTILLER

19 

Ms. CLARKE. So that initiative seems to be a one-way initiative. 

How do you judge whether you have met success in connecting 

them with the lenders? Because that is the ultimate goal; right? 

Ms. MONTGOMERY. Yes. So with that particular effort, I like 

to say the goal is to educate and connect. And so in the Business 

Smart Toolkit, we provide them with guidance on how to host a 

workshop. And what we say is, it is three modules and we say as 

the host organization, you deliver the first module. And then the 

second module, which is about banking relationships, we provide 

them with contact with NAGGL, and we say contact NAGGL and 

they will identify a lender who will do the second module. And then 

we connect them with our SBA district offices, who will then deliver the third module. So that is how they are getting directly connected with SBA as well as with a lender. 

Ms. CLARKE. Have you been able to get a sense of how much 

this is being utilized, what kind of feedback you are getting on the 

ground in terms of the modules, and how that connects to the small 

business community in those particular areas? 

Ms. MONTGOMERY. We recently launched the Business Smart 

Toolkit in October of this year, and so it is just getting—I am sorry, 

October of last year. Excuse me. So it is just getting out into the 

broader community. And so, but the feedback that I have heard has 

been great. That people really like the information. That those organizations who are downloading it and using it, that they feel like 

the content is written at the right level. That it really does help 

them to connect their constituents with our resources, with SBA 

and with bankers. So we are getting great feedback, but it is still 

new. 

Ms. CLARKE. Still young. 

Ms. MONTGOMERY. Yes. 

Ms. CLARKE. Okay. Thank you, Mr. Chairman. I yield back. 

Chairman HUELSKAMP. Thank you, Subcommittee. 

I want to follow up though on one last question. I am trying to 

understand, Ms. Montgomery, your statement about your authorization for the grants, the competitive grants, and if you provide 

Committee documentation of your understanding where you have 

that authority, and I also remind you of the request for your performance metrics and the data that you are using for comparative 

purposes. But it is evident to me that both this Subcommittee and 

the SBA want to bolster the growth and development of entrepreneurs. However, our main concern that mismanagement at the 

SBA is resulting in the prioritization of its own initiatives, rather 

than ensuring scarce taxpayer dollars are carefully spent on the 

most effective programs with proven metrics. 

I hope that today’s hearing will inspire the SBA to reexamine 

their efforts to truly align with GAO’s recommendations and benefit our small businesses. 

And last, I ask unanimous consent that members have 5 legislative days to submit statements and supporting materials for the 

record. Without objection, so ordered. This hearing is now adjourned. 

[Whereupon, at 12:02 p.m., the subcommittee was adjourned.] 

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A P P E N D I X 

SBREP-219 with DISTILLER


Insert offset folio 20 here 99714.001
21 

Chairman Huelskamp, Ranking Member Chu, and members of 

the Subcommittee, thank you for inviting me to testify before you 

about the SBA’s Office of Entrepreneurial Development and my 

oversight of its encompassing programs. 

The Office of Entrepreneurial Development represents the third 

leg of SBA’s support to entrepreneurs by ensuring that relevant 

and effective technical assistance, counseling, mentoring and training is delivered to our nation’s small business owners. To accomplish this, my office is responsible for programmatic oversight of 

the Small Business Development Centers (SBDC), Women’s Business Centers (WBC), and SCORE programs as well as other targeted entrepreneurial support initiatives such as Emerging Leaders, Regional Innovation Clusters, The Learning Center, and 

ScaleUp America. Our aim through the entirety of our programs 

and initiatives is to ensure that our nation’s entrepreneurs find our 

services responsive and relevant to their needs of starting and 

growing successful small businesses. Research shows that 70% of 

small businesses that receive assistance survive more than five 

years. I applaud the House and Senate Appropriations Committees’ 

recognition of the critical role business assistance programs play in 

the success of small businesses through their support of SBA’s 

budget. 

As a former SBDC center director, I would often counsel my 

small business clients that they couldn’t be all things to all people. 

However, as stewards of public resources, we understand that we 

must meet the changing and varying needs of America’s dynamic 

entrepreneurial community of 28 million small businesses. The diversity of our programs is reflective of this aim. Each program has 

a unique value and plays a key role in ensuring a strong entrepreneurial ecosystem. 

As America’s economy innovates and evolves, so do the needs of 

America’s entrepreneurs. The most recent data from the Census 

Bureau tells us that the number of women-owned businesses has 

grown at a rate four times that of male-owned businesses in recent 

years, and they now represent 36% of our nation’s businesses. 

However, while more women are starting businesses, 90% of their 

companies don’t have a single paid employee and only 1.7% generate $1M or more in gross receipts. This is where our Women’s 

Business Centers step in to serve a unique purpose by providing 

services that speak to the particular needs and challenges of 

women entrepreneurs. WBCs offer women entrepreneurs a community of support and services that encourages their growth and business success. Currently, SBA manages 108 women’s business centers that train and counsel over 140,000 clients annually. Unlike 

any of our other programs, the WBCs’ core mission is to empower 

low-to-moderate income women to become entrepreneurs. Our 

WBCs play a critical role in helping to level the playing field for 

women entrepreneurs who face unique obstacles in the world of 

business. 

In 2015, our Office of Women’s Business Ownership launched 

InnovateHER, a national effort designed to identify and showcase 

products and services with potential for commercialization that 

SBREP-219 with DISTILLER

22 

have a measurable impact on the lives of women and families. This 

year this effort involved more than 200 organizations that hosted 

InnovateHER pitch competitions across the nation. Additionally, in 

2015 our office partnered with the Association of Women’s Business 

Centers to develop the first ever survey to capture the outcomes of 

all WBC services. Results from this survey will be published later 

this year, and the insights gained from the survey will be used to 

guide OED in our management and oversight of the WBC program. 

SCORE, our office’s longest-standing program, has been providing mentorship to business owners for more than 50 years. 

SCORE is powered by a corps of 11,000 volunteer mentors, most 

of whom have had successful careers in the private sector as executives and business owners. A SCORE mentor plays a critical role 

in helping to fill the knowledge gaps that entrepreneurs encounter 

as they start and grow their businesses. SCORE volunteer mentors 

volunteer more than 2,246,400 hours to 349,539 clients in fiscal 

year 2015. Starting off in business or even tackling a new business 

challenge can feel like driving along a road through a dense fog; 

you can barely see shapes and you’re straining to get clarity. Our 

SCORE mentors come alongside the entrepreneur to help guide 

them and they clear that fog so that the entrepreneur can see 

what’s ahead. 

In 2015, the Small Business Development Centers (SBDCs) 

placed greater priority on helping long-term clients, who, we have 

found, achieve the highest business outcomes. SBDCs are uniquely 

suited to deliver long-term advising through ongoing one-on-one 

business services tailored to the needs of the individual business 

owner. The average time spent per client increased by 2.5% in 2015 

and business outcomes have also increased. SBDCs’ business advisors helped clients start more than 13,000 new businesses and provided training and advising to over 450,000 entrepreneurs of which 

61,000 were ‘‘long-term’’ clients who received 5 hours or more of 

face-to-face time with their advisor. SBDCs across the country continued to focus on programs and services designed to help underserved markets, emphasizing inclusive entrepreneurship along with 

the already vast array of services provided to their local small business markets. 

As I stated previously, the entirety of our programs are designed 

to meet the changing and diverse needs of entrepreneurs across the 

lifecycle of a small business. 

Since 2007, the Emerging Leaders program has sought to provide 

executive level training to entrepreneurs who come from underserved and underrepresented communities. Over the eight years 

that this program has existed, it has graduated more than 3,300 

executives providing them with more than 100 hours of training 

per cycle, In 2015, we focused on expanding the program from 24 

to 48 sites. We also focused on expanding outreach to attract a diverse group of participants. This year we will again expand the 

program to add five more communities. Our recent data shows that 

88% of participants maintained or added an average of 3 net new 

jobs. Additionally, these businesses provided a median annual salary for new employees of $40,000 and an average salary of $74,000. 

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In addition, 39% of participants reported successfully securing financing for the businesses. 

Building on the success of Emerging Leaders as a cohort-focused 

program, we launched ScaleUp America in 2014 to fill a gap of 

business assistance needs of smaller growth oriented entrepreneurs. These businesses are beyond start up and have a desire 

to grow but need targeted programming and assistance specifically 

focused on the unique needs and challenges of scaling a business. 

Additionally, this initiative has a particular focus on reaching underserved and underrepresented entrepreneurs. 

Although women and minorities represent the fastest growing 

segments of new entrepreneurs nationally, their ventures are generally smaller and experience far less success in terms of revenue 

and employee size. The most recent data from the Census Bureau 

shows that the average annual gross receipts of a woman owned 

business is $144,000, with businesses owned by Black and Hispanic 

women generating $28,000 and $53,000, respectively. By comparison, businesses owned by men generate an average of $638,000 in 

annual gross receipts. To further illustrate this need, minority 

owned businesses generate on average $174,000 in gross receipts as 

compared to non-minority owned firms which generate $552,000 in 

average gross receipts. Often these entrepreneurs lack access to 

growth capital, sufficient business networks, and the necessary 

management advice and training to increase their chances of success. The goal of ScaleUp America is to equip more high potential, 

growth oriented entrepreneurs with the right tools to overcome 

these barriers to growth. To serve this segment of the entrepreneurial marketplace, we have partnered with organizations with a 

keen commitment and focus on strengthening these entrepreneurs. 

In 2015 with the initial launch of the initiative, we also embarked 

on our first ever economic impact evaluation of this initiative. We 

have secured a third party evaluator that is not only capturing 

data on ScaleUp participants, but also a group of comparable small 

businesses that have not received the services of ScaleUp. The findings from this evaluation will be used to improve the effectiveness 

of this initiative as well as provide us with a model in which we 

will evaluate other programs that we manage. 

Small businesses drive innovation and play a critical role in local 

economic development. However, as local economic development efforts seek to build on their region’s assets by encouraging industry 

clusters, small businesses face challenges navigating and gaining 

access to opportunities within the cluster. Our Regional Innovation 

Clusters (RICs) play a critical role in connecting businesses, suppliers, service providers and related institutions within a defined 

cluster. They ensure that local clusters are inclusive of small businesses so that they can effectively leverage the cluster’s assets to 

commercialize new technologies and expand into new markets. The 

portfolio of SBA clusters ranges from smart grid technology in Illinois to flexible electronics in Northeast Ohio to advanced defense 

technologies in San Diego, California. In 2015, we funded three 

new clusters, increasing our portfolio from eleven to fourteen, adding an autonomous and unmanned systems cluster in both Southern Kansas and Oklahoma, a bioscience and technology cluster in 

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St. Louis, Missouri and a wood products cluster in a coal affected 

community in Appalachian Ohio. While the makeup of our clusters 

is unique to each industry, they all seek to provide small business 

participants with services such as technology commercialization assistance, business development support, avenues to access capital, 

and networking opportunities with other cluster stakeholders. 

We take seriously our role as a steward of government resources 

and we want to ensure that our programs are producing the intended outcomes. Last year, we expanded our unit dedicated specifically to implementing and overseeing our data collection, program evaluation, and compliance efforts. Moreover this past year 

we worked closely with our partners—the SBDCs, WBCs, and 

SCORE—to implement a collaborative evaluation methodology. 

Through this work, all partners agreed upon common measures 

that are defined and tracked in a consistent and uniform manner 

which are the basis of all future evaluations. These common measures are jobs created/retained, gross sales revenue, new business 

starts, capital obtained, customer service, and client demographics. 

This will provide all partners with a consistent way to communicate results with stakeholders. 

I hope I have given you a good picture of our thoughtful approach 

to program management, development, and evaluation which demonstrates our responsiveness to the diverse needs of today’s entrepreneur. 

Thank you for the opportunity to testify before you today. I look 

forward to answering any questions you may have. Thank you. 

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Chairman Huelskamp, Ranking Member Chu, and distinguished 

Members of the Subcommittee, thank you for the opportunity to 

testify today on the U.S. Small Business Administration’s (SBA) 

continuing efforts to empower veteran entrepreneurship and small 

business ownership through programs and policies that maximize 

the availability of SBA services for veterans, Service members, and 

their spouses. 

Our program and policies target our nation’s heroes and job creators, and we are grateful for the continued support of the House 

Small Business Committee and this Subcommittee. We look forward to sharing our successes with you and addressing your questions. 

As small business owners, veterans continue to serve our country 

by creating critical employment opportunities and driving economic 

growth. They possess the skills, discipline, and leadership to start 

and operate successful businesses in their communities. Nearly one 

in ten small businesses is veteran-owned. 

Remarkably, though the overall number of veterans declined significantly between 2007 and 2012, the participation of veterans in 

business ownership was persistent according to the 2012 Census 

Survey of Small Business Ownership. During that period the overall number of veteran owned firms increased at a faster rate than 

non-veteran owned firms. We also note that between 2007 and 

2012 the number of women veteran-owned firms increased by nearly three hundred percent. All of this data may indicate strong entrepreneurial activity among the post 9/11 era of veterans. 

My office is strongly encouraged by the trends in veteran entrepreneurship and is fully engaged in supporting then with quality 

programs and thoughtful policy initiatives covering SBA’s primary 

mission areas of counseling and training, access to capital, and access to contracting opportunities. 

Counseling, Training, and Transition Services 

In fiscal year 2015 over 60,000 veterans received training and 

counseling from SBA’s fifteen Veterans Business Outreach Centers 

(VBOC). A prominent and enduring focus of the VBOC program is 

providing transition services via SBA’s administration of the Entrepreneurship Track of the Department of Defense’s Transition Assistance Program (TAP)—known as Boots to Business. 

Working through the Interagency governance of TAP, and with 

our partners support, we were able to deliver Boots to Business 

(B2B) to over 14,000 transitioning service members and military 

spouses in fiscal year 2015, and over 35,000 since the program’s 

launch January 1, 2013. Through an efficient and effective cooperative agreement with the Institute for Veterans and Military Families at Syracuse University, we provide these services to those service members disadvantaged by having to transition from an overseas installation. This year we reached several program milestones: 

1) We increased the percentage of modules being taught by our 

VBOCs 2) We implemented a B2B-specific outcomes assessment 

survey to determine the number and rate of business formation 

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among participants and get their feedback on quality and future 

service needs; and, 3) We implemented an outreach campaign to increase the awareness and participation of military spouses as well 

as service members seeking to prepare for transition earlier in 

their careers as part of the Military Life Cycle model. And, working 

with the Congress and our partners, we are proud to now offer B2B 

to veterans of any era and their families; with a program extension 

we call Boots to Business: Reboot. 

SBA also supports comprehensive entrepreneurial development 

programs specifically designed for women veterans and service disabled veterans. Over 65% of the graduates of these programs have 

started their own business. 

ACCESS TO CAPITAL 

In FY 2016, SBA will sustain the SBA Veterans Advantage program and waive fees for veterans and their families qualifying for 

SBA Express 7(a) guaranteed loans of $350,000 and below and reduce fees by half for SBA 7(a) guaranteed loans between $150,001 

and $5 million. In 2015, lenders utilized the SBA’s 7(a) & 504 loan 

programs to make 3,354 loans, totaling over $1.38 billion to veteran 

owned businesses—an 80% increase over 2014. 

CONTRACTING 

And, in the area of Federal Contracting, the Federal Government 

in 2014 exceeded the 3% goal for contracting with Service Disabled 

Veteran Owned Small Businesses for the third straight year. In 

2016, OVBD is expanding its engagement strategy with Offices of 

Small and Disadvantaged Business Utilization in our sister agencies to ensure the service disabled veteran small businesses opportunities continue to grow. 

OVBD empowers veteran entrepreneurs who seek federal procurement opportunities by building their capacity to compete and 

win contracts. SBA, through a cooperative agreement with the 

Montgomery County Chamber of Commerce Foundation, supports 

the Veterans Institute for Procurement program (VIP). VIP is an 

accelerator-like in-residence educational training program for veteran-owned businesses, instructed by private sector experts, government officials, and agency representatives. 

Thank you for the opportunity to testify before your committee 

today. By supporting our work you are mandating that the United 

States Government does all it should to provide the American 

dream of business ownership to those that fought and continue to 

fight every day to protect it. 

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