On October 24, I was honored to take on the role of chairman of the Board of Governors of the Small Business Investor Alliance (SBIA) at the association’s annual meeting in Palm Beach, Florida. I’m proud to say I’ve served on the SBIA board since 2011, working with a great group that is committed to providing a voice in Washington for lower middle market investors and small businesses. For the past year, as chair-elect, one of my key responsibilities was to work with the outstanding SBIA team to pull together the program for the annual conference and chair the sold-out event in Palm Beach.
In my day-to-day role, I serve as president, chief investment officer and a founding partner of Ironwood Capital, a private equity firm in Avon, Connecticut that invests in lower middle market companies. As chairman of the SBIA, I think one of my most important responsibilities is to raise awareness of what the SBIA is, what it does, who it works with and why it is important.
I’ve developed a quick overview of the players. Apologies in advance for the alphabet soup of acronyms, but all of these entities work together to support growth, scalable capital structures and education throughout America.
The SBIA, SBA and SBICs – Which is What?
The SBIA is the leading association of lower middle market U.S. private equity funds and investors. Our membership is comprised of private equity funds that make investments in small or lower middle market businesses nationwide, limited partners who make investments in those private equity funds, and a limited number of professional service providers. SBIA member-funded companies are an economic engine for small business in America. From 1995 to 2014, a period that included the Great Recession, SBIA member funds created 3 million new jobs and supported an additional 6.5 million jobs. Go team!
As an organization, SBIA’s talented and experienced staff is second-to-none. They provide a clear and consistent voice for our members on Capitol Hill and with federal regulators. They advocate, with great success, for increased access to capital for small businesses and smart tax policies that promote and support domestic investment, the growth of small businesses and leadership diversity. In fact, I will be the fourth female chair of the SBIA in nine years, highlighting the strength of the organization’s female managers.
The SBIA also provides continuing educational programs that focus on best practices in the industry. There are programs geared to leaders of portfolio companies that have recently received private equity or mezzanine investment from SBIA member funds and programs and events for fund managers that share best practices and create networking opportunities.
The SBIC Program is a multi-billion dollar capital access program administered by the U.S. Small Business Administration (SBA). An SBIC (small business investment company) is a privately-owned investment company that is, as you would expect, licensed and overseen by the SBA. SBIC funding is available to growing, established businesses with less than $6.5 million of net income and less than $19.5 million in tangible net worth. Most SBICs are SBIA members. SBICs supply small businesses with financing in both the equity and debt arenas.
I’m proud to say that Ironwood Capital is a long-time, active SBIA member, investing debt and non-control equity in established privately-held businesses through multiple funds, including several SBICs. We have benefited from our involvement with the SBIA and profited from our SBIC investments, as have our limited partners and the portfolio companies in which we have invested.
As I take the reins at the Small Business Investor Alliance I look forward to a year of learning from the members and staff of this high-performing organization.