Entrepreneurs Need Support, Say Clyburn, Pai
Entrepreneurs need support because they are the drivers of technological innovation, said acting FCC Chairwoman Mignon Clyburn and Commissioner Ajit Pai at an access to capital conference held at the commission Thursday for small, women- and minority-owned firms. “Entrepreneurs have to think carefully … what their strategies for growing a business are going to be,” said Pai. “I hope this event creates a fruitful matching of ideas and capital, because it is the future of this industry.” Angel investors have become an increasingly important part of developing innovation, because they are more likely to invest, said J.S. Gamble, Blu Venture Investors co-founder. “One in 10 startups get funding from angel investors and one in 1,000 get money from venture capital firms.” Panelists from angel investment firms spoke about how such investors are likely to be more involved in their investments because they invest their own money and have a personal stake in their companies.
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Clyburn said there’s a need to have more minority- and women-owned businesses. The number of full-power TV stations owned by African Americans decreased from 12 to five from 2011 to 2012, she said. “Minority and female ownership has become increasingly marginalized over the past decade during a time of increased media consolidation, and those are voices we need the most right now.”
A three-prong approach is needed to boost media diversity: reviewing the FCC’s media ownership rules, Congress reinstating the minority tax certificate, and active public engagement by the commission, Clyburn said. “Current information on minority ownership is obsolete and data on female ownership is essentially nonexistent. While the FCC is updating our ownership rules, more accurate and encompassing studies are needed to get a precise picture of the situation.” Clyburn suggested Congress should reinstate the tax certificate repealed in 1995 for owners of a radio or TV station to sell that property. “Public engagement is critical in bringing the issue of lack of media ownership diversity and diversity in the technology space to the forefront,” she said. “The voice of the people is loud, and if used properly, it can make a lot of difference."
Panelists weighed the advantages and disadvantages of entrepreneurs using angel investors. Such investors tend to have more experience in particular fields, said Elizabeth Hess, TRX Systems chief financial officer. “They understand what you are doing and may want to be more closely involved in your activities,” she said. “The benefits far outweigh them being too involved in your company, because you get their experience in the field.” Angel investors tend to look for business plans that have many exits, said Gamble. “We are looking for a clear roadmap to investment. Companies with potential inquirers add value to the company.” Angel investors are also more patient with how long it takes businesses to expand, said Terry Hicks, Ben Franklin Technology Partners vice president. “We would like to make the money back with a little sweetener.” Gamble said investors are looking toward an “investment point where the sale is liquidated.”