Originally published by GoDaddy’s Venture Forward Research Initiative
By Alexandra Rosen, Global Head of GoDaddy Venture Forward.
Despite record new business formation, which is outpacing population growth by 10% according to GoDaddy Venture Forward, access to capital remains a top challenge for microbusinesses. Capital is key to the growth of ventures and consequentially, our greater economy.
At the 2024 Milken Institute Global Conference, I joined a panel tackling the crucial question: “How can we innovate to establish better funding models, given the essential role small businesses play in job creation and economic growth?”
Our discussion opened with the acceleration of new small and microbusiness starts in recent years and their outsized impact on local economies – driving up local gross domestic product (GDP), median household income and job creation. This is in addition to the diversity of people and circumstances embarking on entrepreneurship. We then explored various strategies to enhance access to capital, including evolving underwriting processes and the importance of also offering technical assistance and greater community support.
Panelist Sekou Kaalund noted how asset ownership helps drive generational wealth and that Black business owners have eight times the wealth of Black non-business owners. Lauren Grattan emphasized the importance of creating more accessible capital steppingstones to help entrepreneurs of all different backgrounds and experiences bring their innovations to life.
Chris Pilkerton shared insights from his tenure at the Small Business Administration, stressing the need for a modernized support system. Eric Cromwell highlighted the importance of meeting entrepreneurs where they are and the role of networking in their long-term success.
Flexible cash-flow measures are critical to enabling growth.
“We don’t need to look at different data, but to look at data differently,” stated Sekou Kaalund, underscoring the importance of evolving how we leverage data.
More than 40% of entrepreneurs converted their online microbusiness into their primary income source, according to the Venture Forward 2024 U.S. National Survey. These businesses often start with less than $5,000, and those who invest more initially tend to achieve higher revenues. Allocating time and money faster can accelerate business growth, making it necessary to rethink financial models for small and microbusinesses in this time of innovation.
Supporting small businesses is not just smart and kind, but economically essential.
Venture Forward research has also revealed:
For every microbusiness entrepreneur, more than seven jobs are created at the county-level.Microbusinesses increased by 15% nationwide since 2019.More than one-third of microbusinesses contribute 51% of their household’s income.
Our discussion highlighted the critical need for improved funding models to ensure the continued growth and success of small businesses. These enterprises are vital to innovation and economic health, and they enrich communities with their diverse offerings.
About the 2024 Milken Institute Global Conference
Over 4,000 attendees and tens of thousands of online viewers attended the 2024 Milken Institute Global Conference, themed “Shaping a Shared Future,” to explore solutions for the future. As global head of GoDaddy Venture Forward, I had the opportunity to delve into the critical impact of America’s small businesses.
The panel I joined was moderated by Kristen Fanarakis, associate director of the Small Business Policy and Innovation Initiative at Milken Institute, and also included:
Eric Cromwell, founding member of Cromwell Schmisseur LLC.Lauren Grattan, chief community officer at Mission Driven Finance.Sekou Kaalund, executive vice president and head of Branch and Small Business Banking at U.S. Bank.Chris Pilkerton, chief legal and regulatory strategy officer at Accion Opportunity Fund.
Replay the full panel discussion here.
