[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




 
    OVERSIGHT OF THE OFFICE OF INVESTMENT AND INNOVATION AT THE SBA

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON HEALTH AND TECHNOLOGY

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                            JANUARY 12, 2016

                               __________
                               
                               
                               
                               
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            Small Business Committee Document Number 114-038
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                   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 VELAZQUEZ, 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
                  
                  
                  
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Mike Bost...................................................     1
Hon. Seth Moulton................................................     2

                                WITNESS

Mr. Mark Walsh, Associate Administrator, Office of Investment and 
  Innovation, United States Small Business Administration, 
  Washington, DC, accompanied by Mr. John Williams, Director, 
  Innovation and Technology, Office of Investment and Innovation, 
  United States Small Business Administration, Washington, DC, 
  and Ms. Carol Fendler, Director, Licensing and Programming 
  Standards, Small Business Investment Company (SBIC) Program, 
  Office of Investment and Innovation, United States Small 
  Business Administration, Washington, DC........................     4

                                APPENDIX

Prepared Statement:
    Mr. Mark Walsh, Associate Administrator, Office of Investment 
      and Innovation, United States Small Business 
      Administration, Washington, DC, accompanied by Mr. John 
      Williams, Director, Innovation and Technology, Office of 
      Investment and Innovation, United States Small Business 
      Administration, Washington, DC, and Ms. Carol Fendler, 
      Director, Licensing and Programming Standards, Small 
      Business Investment Company (SBIC) Program, Office of 
      Investment and Innovation, United States Small Business 
      Administration, Washington, DC.............................    18
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    None.


    OVERSIGHT OF THE OFFICE OF INVESTMENT AND INNOVATION AT THE SBA

                              ----------                              


                       TUESDAY, JANUARY 12, 2016

                  House of Representatives,
     Subcommittee on Health and Technology,
                       Committee on Small Business,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 3:02 p.m., in 
Room 2360, Rayburn House Office Building, Hon. Mike Bost 
presiding.
    Present: Representatives Bost, Luetkemeyer, and Moulton.
    Mr. BOST. Good afternoon. Thank you all for being here 
today. We want to conduct this oversight hearing of the Office 
of Investment and Innovation at the Small Business 
Administration, or SBA. Providing robust oversight for the SBA 
is one of the most important functions of our Committee. The 
SBA plays a significant role in providing assistance to 
American entrepreneurs. The SBA provides small business with 
financing, entrepreneurial development, education, and 
government contracting assistance. Oversight helps ensure that 
the agency is effectively utilizing its resources to provide 
the service mandated by Congress and expected by the American 
people.
    Throughout the month of January, our Committee is holding a 
series of oversight hearings examining all aspects of the SBA, 
its management, and its programs. We began last week and we 
heard an assessment of the Government Accounting Office, or 
GAO, on a report detailing inefficiencies and ineffective 
management operations throughout the SBA. Today we will examine 
the programs implemented by the Office of Investment and 
Innovation, or the OII, and its efforts to deliver effective 
assistance to entrepreneurs in an efficient manner.
    The OII is responsible for administrating several very 
popular programs offered by the SBA. The Small Business 
Innovation Research and Small Business Technology Transfer 
Programs provide government contracts for small business to 
develop cutting-edge technology needed by government agencies. 
OII also administers the Small Business Investment Company 
Program or SBIC. The SBICs are privately owned and managed 
investment funds. They are licensed and regulated by SBA. And 
the SBICs use their own capital plus funds borrowed with the 
SBA guarantee to make equity and debt investment in qualifying 
small businesses.
    As I mentioned earlier, last week, our full Committee heard 
testimony from the GAO regarding several persistent problems 
with the SBA's management. The testimony and accompanying 
reports were quite troubling, to say the least. Bill Shear, the 
GAO's Director of Financial Market and Community Investment, 
testified that the GAO saw that certain recurring themes 
happened over and over again all across the agency. This 
affected all aspects of its operations and its programs. Mr. 
Shear also testified that the SBA needs to commit to deal with 
these issues. The services provided by the SBA are too 
important not to take significant action to ensure the agency 
faithfully executes its duties.
    It is my hope that through vigorous oversight, such as this 
Subcommittee hearing, we can begin to right these wrongs and 
get the SBA back on track. Our goal is making sure that the SBA 
continues to provide a service America's Small businesses need. 
We must work together to solve these problems because America's 
small businesses are counting on all of us.
    Again, I want to thank you all for being here. I am looking 
forward to today's discussion.
    I now yield to ranking member Moulton from Massachusetts 
for his opening remarks.
    Mr. MOULTON. Thank you, Mr. Chairman.
    Thank you for joining us here today.
    The Office of Investment and Innovation performs a number 
of critical missions that help small businesses flourish. Many 
of the companies served by this division of the SBA are 
cutting-edge, high-technology enterprises with great potential 
for job creation. Entrepreneurs in these sectors have often 
different capital requirements than businesses operating in 
more traditional spaces. For instance, while a traditional bank 
loan may be the best financing for a new mom-and-pop hardware 
store, for a cutting-edge small pharmaceutical developer, 
equity capital is often a better fit for their capital needs.
    OII helps meet this important need through its Small 
Business Investment Company, SBIC, program. In 2014, this 
initiative channeled $50.7 billion to small emerging firms, 
helping many innovative firms mature, grow, and bring new 
products to market. While this important program has had great 
success, it is important that there is sufficient oversight so 
that it may reach its full potential. In the most recent 
appropriations legislation, the omnibus, Congress raised the 
leverage caps for family of funds SBIC licensees, permitting 
groups of funds to draw $250 million in SBA leverage. Already, 
20 SBICs are within 10 percent of the previous $225 million 
cap. Six SBICs are already maxed out.
    We can expect this additional leverage capacity to be 
utilized. Therefore, we should also ensure that there are 
appropriate safeguards in place to limit the exposure of 
taxpayer dollars. I look forward to hearing how SBA is managing 
this risk during the course of this hearing.
    It is also worth looking at diversity among recipients of 
SBIC investment. Last year, only 6 percent of investments went 
to firms owned by women, minorities, or veterans. It is 
important that we encourage entrepreneurship among these 
disadvantaged groups. I would like to hear how today we can 
improve in this area.
    In addition to the SBIC program, the OII oversees the Small 
Business Innovation Research Program and the Small Business 
Technology Transfer measure. The SBIR program is an important 
partnership between Federal agencies' R&D efforts and 
entrepreneurs, harnessing small businesses' innovation to 
develop new products that meet Federal needs, which can later 
become commercialized for broader use. I have seen firsthand 
how this program has worked in the Boston area and recently met 
with the New England Innovation Alliance to discuss this 
important program.
    One SBIR firm in my district, Aerodyne Research, makes 
state-of-the-art scientific instruments. These products measure 
gases or aerosol particles in real time and with great 
sensitivity. The firm has grown to over 60 employees and 
engages in millions of dollars in sales to the private sector.
    The related STTR program helps commercialize R&D performed 
by small companies affiliated with universities and Federal 
laboratories. Like SBIR, this program harnesses the expertise 
of small firms on the cutting edge of research. Both programs 
are vital to our country's ongoing technological 
competitiveness. It is important that they too operate 
effectively and efficiently.
    In 2011, Congress reauthorized both of these programs while 
making changes to ensure that small businesses are able to 
participate in the program and increase oversight. I am 
particularly interested to see the progress in implementing 
these changes and what the SBA is doing to ensure that the 
program is working effectively for small firms.
    Mr. Chairman, small businesses in every sector are vital to 
the innovation that creates new products, sparks job growth, 
and will ensure that our Nation remains at the forefront of 
technological development. OII's programs provide critical 
support to small firms that are advancing this goal, and I look 
forward to hearing about how improvements can be made at SBA to 
maximize the value of these initiatives.
    Thank you, and I yield back.
    Mr. BOST. If Committee members have any opening statement 
prepared, I ask that they submit them for the record.
    I would like to take a moment first off to explain the 
timing lights for you. Okay. You will have 5 minutes to deliver 
your testimony. The light will start out on green. When you 
have 1 minute remaining, the light will turn to yellow. Then, 
finally, at the end of the 5 minutes, it will turn to red. We 
just ask that you kind of adhere to these limits.
    Our witness today is Mr. Mark Walsh, the SBA's Associate 
Administrator of Office of Investment and Innovation. He has 
over 30 years of experience as a technological entrepreneur, 
manager, and investor prior to serving at SBA. Mark was 
executive chairman of Homesnap.com, a computer application for 
residential real estate; and CEO and cofounder of GeniusRocket, 
a leading provider of crowdsourced marketing, right, for major 
brands of global non-for-profits. He has been a division head 
and a senior executive at technological and content companies 
like GE, AOL, HBO, and others.
    More recently, he has been an active angel investor, 
shareholder, or board member adviser in a number of successful 
startups and high-growth companies and has been named one of 
the 100 Tech Titans by Washingtonian Magazine for each edition 
since 2009 until today.
    Mr. Walsh, thank you for being here with us today. We 
recognize you for 5 minutes.

  STATEMENT OF MARK WALSH, ASSOCIATE ADMINISTRATOR, OFFICE OF 
    INVESTMENT AND INNOVATION, UNITED STATES SMALL BUSINESS 
ADMINISTRATION, WASHINGTON, D.C.; ACCOMPANIED BY JOHN WILLIAMS, 
 DIRECTOR, INNOVATION AND TECHNOLOGY, OFFICE OF INVESTMENT AND 
   INNOVATION, UNITED STATES SMALL BUSINESS ADMINISTRATION, 
 WASHINGTON, D.C.; AND CAROL FENDLER, DIRECTOR, LICENSING AND 
PROGRAMMING STANDARDS, SMALL BUSINESS INVESTMENT COMPANY (SBIC) 
  PROGRAM, OFFICE OF INVESTMENT AND INNOVATION, UNITED STATES 
        SMALL BUSINESS ADMINISTRATION, WASHINGTON, D.C.

    Mr. WALSH. Congressman Bost, Ranking Member Moulton, and 
distinguished members of the Subcommittee, thanks for inviting 
me to discuss SBA's Office of Investment and Innovation. I am 
pleased to detail our flagship programs, Small Business 
Innovation Research, Small Business Technology Transfer, and 
Small Business Investment Companies, as well as our successful 
support for accelerators and incubators.
    I want to begin with a little more background on me. I 
joined the SBA about a month ago. Prior to my arrival, I was a 
venture capitalist, an angel investor, and a corporate director 
for a number of high-growth startups and more mature companies 
in a wide variety of industries. In addition, I spent the bulk 
of my career in the technology arena and served as CEO for a 
business-to-business content and e-commerce company during the 
late 1990s. Having spent over 30 years in the private sector, 
as was mentioned, I know the importance of this Committee and 
the contributions the programs in the Office of Investment and 
Innovation offer. I am honored to testify before this 
distinguished group and to serve as the new head of OII.
    One of the best ways to communicate power of our programs 
is through examples. One of those is a San Francisco startup 
called Lift Labs. We all know the effects of Parkinson's 
disease, the tragic effects. Lift Labs creates an anti-tremor 
spoon that cancels up to 70 percent of the hand tremors 
associated with this disease. With this spoon, an affected 
individual is able to eat with dignity and confidence. This 
life-changing product received early stage capital from the 
National Institute of Health's SBIR program. This early influx 
of capital allowed Lift Labs to take its product from the 
research and development stage to market. Today, Lift Lab 
spoons can be purchased on Amazon.
    Successful trajectories like these are a priority for my 
office in SBA. Last year alone, through my office's flagship 
programs, the U.S. Government provided $2.5 billion to over 
5,000 SBIR and STTR projects. And our 303 Small Business 
Investment Company investment partners managed over $25 billion 
in private capital and SBA-guaranteed leverage and commitments, 
benefitting over 100 small businesses.
    Our SBIR STTR program, labeled America's Seed Fund, is a 
key pillar in the Federal Government's strategy to provide seed 
capital to talented entrepreneurs in science, technology, and 
engineering. Since its inception in 1982, the program has 
awarded over 50,000 awards with $30 billion in funding to early 
stage companies. SBIR- and STTR-funded companies have made 
lasting contributions to the advancement of science and 
industry, and will continue to do so, like the example in 
Massachusetts that was cited.
    Companies, like Lift Labs, with SBIR support look to be the 
next potential big employers like past SBIR recipients, 
companies like Qualcomm, Biogen, iRobot, and Symantec.
    Our growth accelerator competition enters its third year. 
To date, this program has invested nearly $7 million in 138 
accelerators across these great United States. Accelerators in 
43 States, including the District of Columbia and Puerto Rico, 
have received awards through this program. Last year alone, we 
awarded 88 prizes to accelerators of $50,000 each. In the 
coming year, resources will be made available in the fiscal 
2016 omnibus appropriation to all us to continue this valued 
program.
    Our growth accelerator competition plays a crucial role in 
the entrepreneurial ecosystem by enhancing the effectiveness of 
organizations committed to providing financial and technical 
assistance to American startups and small businesses.
    And speaking of buses, we plan to continue our SBIR bus 
tour with SBIR partners, including incubators in over 21 States 
later this year, spreading the good word about their work and 
their potential.
    The Small Business Investment Company's history is equally 
rich. It channels long-term investment capital to America's 
small businesses. Since it was created in 1958, over $80 
billion has been invested, helping finance 170,000 American 
small businesses. In fiscal year 2015, the SBIC has invested 
over $6.2 billion in total financing between the SBA leverage 
and our fund partners to 1,210 portfolio companies, which 
created or sustained roughly 130,000 jobs. That is a 15-percent 
increase in financing compared with fiscal 2014.
    To conclude, as head of the SBA's Office of Investment and 
Innovation, I am committed to ensuring that more and more of 
our Nations' innovators and investors know about our programs 
and know how to access them. The SBIR, STTR, and SBIC 
initiatives are foundational components of our mission. All of 
us look forward to increasing success and demonstrable outcomes 
from the access to capital that we provide to America's most 
exciting arena: small businesses. Thank you.
    Mr. BOST. Thank you. And because Mr. Walsh has been only in 
this position for a short time, we have asked that he be 
accompanied by senior members of his team during the 
questioning and answer portion of the hearing. Joining him at 
the table now will be John Williams, Director of Innovation and 
Technology for the Office of Innovation and Investment; and 
Carol Fendler, Director of Licensing and Programming for the 
SBIC program.
    Thank you both for being here as well.
    And I would like to yield myself 5 minutes for the 
questioning to start off with.
    Mr. Walsh, I understand that you have experience in the 
private business sector, from what you explained. What were 
your initial impressions of how the SBA functions and what you 
have seen that would immediately--that you would like to 
improve on?
    Mr. WALSH. Well, I spent my career, really, in innovation 
and investments. So the two I's of our office of OII were 
directly DNA-level related to my background. So I was expecting 
to see a lot of alignment in the day-to-day of my team over 
there. And I have seen that, Congressman. We help small 
companies, be they startups with very small staffs using 
innovation and research for labs to more successful companies 
with positive cash flow and hundreds of employees through the 
various funding efforts that we have, point one.
    Point two, we have a rich and robust network of over 300 
professional investment firms whose debt leverage we help send 
out or their investment decisions are helped by the investments 
that we make with them.
    My first impression is very positive to the overall 
structure of the program. Secondly, perhaps as importantly, I 
must admit I am incredibly impressed with the teammates that I 
have over at the office. I mean no disrespect to government in 
general, but sometimes people walk in expecting government to 
be more dysfunctional. In fact, I have found zero of that. I 
have been incredibly impressed with the professionalism, the 
caution, the care, and the, frankly, futuristic outlook of all 
of my teammates at OII.
    I don't know enough about SBA in general. I am still 
learning my way through the hallways, but I do expect that 
across the board, I will find SBA to be as impressive as my 
teammates in OII in their professionalism and, lastly, in their 
commitment to the mission. SBA is one of the few organizations 
I see in the Federal Government with no regulatory power. We 
are about helping companies. I find that that both maps against 
my personal goals and my personal background. And it has been 
very, very encouraging to see it day-to-day in my office.
    Mr. BOST. So the office works perfectly.
    Mr. WALSH. I meant not to say that, Congressman. There is 
room for improvement in every single organization, believe me.
    Mr. BOST. Okay. There is an important time change coming up 
here. We have a very short time for this President to be in 
office, and we are coming up on 2017. What action is being 
taken right now to ensure that the SBA leadership team can pick 
up right where it leaves off with a new administration? Do you 
have a transition plan in place, and what is your strategic 
plan for the long goal?
    Mr. WALSH. I was lucky to have actually two predecessors in 
a row, both of whom I knew personally. In fact, my predecessor 
I helped recommend to get the job. So his transition plan that 
he left me was rich and robust and we, being friends, were able 
to have a very productive time together conversing before I 
physically took over. I arrived with a pretty good transition 
plan in place for the day-to-day operations of what I oversee 
at OII. I would expect I won't tweak that too much if I resign 
and move on in January of 2017.
    But to the second part of your question, an important part, 
in my opinion, what kinds of initiatives do we think we can 
make some progress on in this coming year or start and leave in 
place with some energy behind them for my successor to take 
over and that man or woman to progress forward with those 
initiatives. I will give you one example. The accelerator and 
incubator program that we have initiated where we visit--we 
test--we had 800 applications from innovation incubators and 
accelerators around the U.S. We awarded prizes to over 88 last 
year. That is an amazing team and family of offices all around 
the U.S. in your States and many, many other States that are 
ready to give advice and help to companies that need that kind 
of commercialization advice. SBIR companies, which today often 
get grants but have a tough time crossing that desert, that 
chasm of investment in the innovation and research and becoming 
a commercialized company, we are looking to apply our 
innovation incubators and accelerators to map them 
geographically--against our SBIR awardees to give them that 
innovation incubation and accelerator advice to help them 
become more commercializable. That is a synergistic use of 
assets we are currently doing. We hope to get that started in 
2016 and 2017 and have it ready for my successor if and when 
that man or woman comes aboard.
    Mr. BOST. Wonderful. My last question before my time runs 
out, before we turn it over to the ranking member, is actually 
for Ms. Fendler. As part of the omnibus legislation passed last 
year, Congress increased the leverage allowable to the SBICs 
from $225 million to $350 million. This will help the SBICs 
raise more private capital and increase leverage for investment 
in the domestic small business. Have the standard operating 
procedures governing the SBICs' licensing been updated to 
reflect this change? If not, why?
    Ms. FENDLER. Yes. We don't believe that there are any 
specific changes that need to be made to our standard operating 
procedures to accommodate this change. We think that the 
procedures that we have in place are the correct procedures for 
risk management. There are two things that we think will happen 
as a result of the increase in the family of funds limit. One 
thing is that we think there are managers of existing SBICs who 
will come to us sooner than they might have otherwise to launch 
a new SBIC. Second, we think that there are existing SBICs that 
are going to come to SBA for additional leverage commitments to 
take advantage of the higher ceiling. In either case, we think 
that we have got the right rigorous standards in place to 
manage that risk.
    In the case of a brandnew SBIC, if we have a management 
team coming in to apply for a second fund or a third fund, our 
subsequent fund SBICs go through the same full licensing 
process that any other SBIC does. That begins with in-depth 
analysis of the financial performance and also the regulatory 
compliance of the existing SBIC or SBICs that we are already 
very familiar with. We have a very meaningful license review 
and approval process that involves approval right up to the 
highest level of the SBA, meaning final approval by the SBA 
Administrator.
    With respect to existing SBICs coming in for additional 
leverage commitments, again, those commitments--any request for 
a new commitment is going to go through SBA's really very 
strict credit underwriting process. That includes financial 
analysis, risk analysis and, again, requires approval at 
multiple levels of SBA, concluding with Mr. Walsh.
    The other aspect that really applies both to new SBICs or 
more highly leveraged SBICs is our monitoring process. We have 
really the same set of risk management and oversight procedures 
that we apply to all licensed SBICs. We are continuously 
looking at each fund's financial performance and repayment 
prospects.
    Now, the one key thing, obviously, not having unlimited 
resources is that we do focus our monitoring on funds where the 
exposure is highest. Certainly, we will be looking particularly 
closely at families of funds where our exposure has gone up to 
that full $350 million.
    Mr. BOST. Thank you.
    With that, my time has definitely expired.
    I want to turn 5 minutes over to the Ranking Member 
Moulton.
    Mr. MOULTON. Thank you, Mr. Chairman.
    Ms. Fendler, Mr. Williams, thank you very much for your 
service.
    Mr. Walsh, you and I share our fellow alumni of a halfway 
decent business school up in Boston. You have a business career 
that far outstrips my own, however. There are many other things 
that you could be doing. We are very grateful that you have 
taken on this job in public service. So thank you.
    Mr. Walsh, in the last SBIR reauthorization, Congress 
included a 3-year pilot program that allows agencies to use 3 
percent of their SBIR funds to cover administrative costs 
associated with the program. However, we have yet to see any 
reports from the SBA on the effectiveness of the pilot and 
whether agencies are using these funds on allowable costs. With 
the recent extension of the pilot, what steps is your office 
take--what steps are your office taking to ensure that there is 
effective oversight of this pilot program? How many projects 
does each employee currently oversee?
    Mr. WALSH. The 3 percent of the 3 percent--and thank you 
for your compliment about my educational background. I probably 
graduated a few years ahead of you just, for the record. But I 
did learn a lot there and thank you for your recognition of 
that.
    The 3 percent of the 3 percent, as the shorthand to your 
point, is something that we still are relatively fresh to, and 
I may ask my colleague Dr.--John Williams--I call him Dr. 
Williams around the office sometimes--to flesh out the 
specifics of your answer. The idea of having that type of 
subset of the overall granting power from each of the agencies 
that we use to find innovative companies, one of which you 
cited, is something that we want to learn more about because 
whether we are the actual spender of those dollars from an 
infrastructure perspective or they are the spender of those 
dollars is something that we are learning more about.
    With that, I will plead my 30-day ignorance level, which I 
have yet to use, but I will use it right now, Congressman, and 
I will ask John Williams to weigh in.
    Mr. MOULTON. Fair enough. You have how many life lines 
left?
    Mr. WILLIAMS. The program started with a slow start. And so 
we are actually just really getting into our third year where 
we are spending that money in contracts and things to provide 
assistance. We actually don't spend any of the money. All the 
money is out at the agencies. We are playing a role of 
monitoring. We are working on reports. We do have reports on 
what they plan to do with the money. They submit those to us 
every year. We are working, and we have got preliminary reports 
of what they have done with it. But what we want to see is 
results. And so----
    Mr. MOULTON. Mr. Williams, when do you think we can expect 
to see those reports?
    Mr. WILLIAMS. Next six--within 6 months.
    Mr. MOULTON. Within 6 months.
    Mr. WILLIAMS. Yes.
    Mr. MOULTON. Okay.
    Mr. WILLIAMS. 30 June.
    Mr. MOULTON. Okay. Let me move on to the next question, Mr. 
Walsh.
    Civilian agencies were given the authority to create 
commercialization pilot programs similar to the one currently 
in existence at the DOD in the last SBIR reauthorization. Can 
you tell us which agencies have taken advantage of this 
authority and created such programs?
    Mr. WALSH. Again, I will plead--how many do I have? Two 
left? Is there three in ``Who Wants To Be a Millionaire?''
    My initial impression is clear that DOD is the lead dog in 
the example or the scenario that you have questioned us on. But 
I think others are becoming more and more robust. And, with 
that, again, I will look for validation.
    Mr. WILLIAMS. Rephrase that question again.
    Mr. MOULTON. So which other agencies besides DOD have taken 
advantage of this program?
    Mr. WILLIAMS. Of the 3 percent?
    Mr. MOULTON. It is the authority to create 
commercialization pilot programs similar to the one that 
currently exists in DOD. My understanding is that previously 
only DOD was authorized to do this. Now other agencies have 
been authorized as well. Have any of these agencies actually 
taken advantage of this authority?
    Mr. WILLIAMS. Yes, they have. And the programs for the 
civilian agencies are a little bit different than the DOD's 
programs.
    Mr. MOULTON. Okay.
    Mr. WILLIAMS. There is a program called the 
Commercialization Pilot Program that both NIH and DHS use. And 
that is a program where they fund universities--dollars or push 
money through the universities using the SBIR dollars--to help 
do commercialization assistance to SBIR companies. Those two 
organizations, DHS and NIH, do it. NIH is a much larger 
program, and thus, their effort is larger.
    Mr. MOULTON. My last question, because I am running short 
on time, Mr. Walsh, again, I understand that you have only been 
there for 30 days, but perhaps your colleagues can help with 
this. Last week, our Committee heard from the GAO on a number 
of open recommendations it had for the various programs at SBA. 
There are currently 10 open on the SBIR and STTR programs. Why 
are there so many pending recommendations for these programs? 
And what actions is your office taking to implement these 
changes?
    Mr. WALSH. I will take a shot at that. As you might 
imagine, there has been a significant amount of energy directed 
to the specific challenge that you lay out. And my new office 
is not immune from that. The 10 or so that you suggest are SBIR 
centric. I think a couple at least are expired; i.e., that we 
actually have taken care of, but the reporting process is not 
as robust as I would like to see. But of the eight or so that 
are remaining, John Williams' team and I have really made a 
commitment to ourselves that we will investigate each and every 
single one and try and take it off the docket so it is no 
longer an issue of conversation between the Committee and what 
we do.
    I am not able to give you a specific date. But I can 
guarantee you; I pledge that I look forward to conversing with 
you and your teams and keeping you fully informed as to how we 
are knocking off each and every one of those over time.
    Mr. MOULTON. And my time has expired, but I just want to 
emphasize, I think you are right that if we could just have 
some more communication about how this is going, it may reduce 
some of the friction between the SBA and the Committee.
    Mr. WALSH. I look forward to you seeing me do that.
    Mr. MOULTON. Great.
    Thank you, Mr. Chairman.
    Mr. BOST. With that, I want to recognize the gentleman from 
Missouri, Mr. Luetkemeyer.
    Mr. LUETKEMEYER. Thank you, Mr. Chairman.
    Welcome, Mr. Walsh.
    To follow up on the last question a little bit because I am 
kind of concerned you are walking into a quagmire here. You 
know we had 69 open recommendations from GAO. You still had 10 
when you walked in in your area. This isn't something that 
happened last year. This is stuff that has been dragging on for 
years. Same thing with standard operating procedures. Had one 
example here, SOP for licensing SBICs in 1984, which was not 
modified until 2014, despite the fact that SOP failed to 
address the application for new types of SBICs credit in 1984.
    You know, some of your predecessors were pretty lax. Not 
very competent, quite frankly, in getting things done. We are 
looking forward to your expertise being able to get some things 
done, hopefully shake up what is going on here. Because, 
obviously, the taxpayers and our citizens deserve better. I am 
a big fan of SBA. I think it has got lots of opportunities to 
help lots of people. But, obviously, when GAO comes in with 
recommendations that 80 percent across the board of other 
agencies get their recommendations done and the recommendation 
of Small Business is 50 percent, we got a problem. These are 
important. They are not something to just blow off. Hopefully 
you take it seriously. I am willing to give you a pass on it 
because I have been in places before where we started 30 days 
in, and it takes a while to get things done.
    One of the other questions I have: Over all the programs 
that you see, how many of them are loan programs versus grant 
programs?
    Mr. WALSH. The SBIC program is a loan program. We grant 
debt leverage to professional investment entities, venture 
capital firms, private equity firms, business development 
corporations or banks in some cases, and they take that 
leveraged debt to add on to their investment. That is SBIC. 
SBIR is a grant program.
    Mr. LUETKEMEYER. Okay.
    Mr. WALSH. The accelerator and incubator program is also a 
grant to those incubators. So two are to grant; one debt.
    Mr. LUETKEMEYER. Very good. How is the past-due ratio? What 
is the size of your portfolio on your loans, and what is the 
past--if you don't know, I wouldn't----
    Mr. WALSH. Well, the debt portfolio stands today at about 
$25 billion.
    Mr. LUETKEMEYER. Okay.
    Mr. WALSH. Our loss ratio all in is about 3.5 to 4 percent.
    Mr. LUETKEMEYER. What is your past-due ratio?
    Mr. WALSH. Past-due ratio I do not know. I will have to get 
back to you on that.
    Mr. LUETKEMEYER. That is fine. I was just curious. It is a 
question that I ask quite often of people who oversee different 
programs, loan programs. I was formerly in the financial 
services world. If you don't watch those things, how do you 
know what is going on? I asked this of your colleague 
yesterday, Ms. Sanchez, and her answer to me was--she had a 
$1.4 billion portfolio--``Oh, we don't have any past dues. The 
banks take care of that,'' which was a breathtaking comment.
    Absolutely stunning that she had no idea, being there for a 
significant amount of time, what her past due ratio was of over 
a billion dollar portfolio. That is unacceptable. This is 
something that, to me, is important. Hopefully you will take 
that to heart and continue to watch it very carefully. We want 
to make sure we are good stewards of the taxpayers' dollars 
here and make sure they get good value for their investment.
    Mr. WALSH. I will not return without knowing that ratio, 
Congressman.
    Mr. LUETKEMEYER. That is not a knock on you, by the way, 
today. It is something that I think you should know. It is 
something that you should look at every month on your monthly 
reports where you are at. See what the economy is doing and how 
your loans are doing and see what your loan officers that are 
out there in the field how they are doing.
    Just some general questions. Mr. Shear was here last week 
and used the term siloed where he--because various parts of the 
agency can't effectively communicate with other parts, believes 
some mistakes can be repeated. He talked about that. How do you 
see your part of the agency? Do you interact a lot with other 
SBA administrators--administrative personnel throughout the 
agency, with the executive officer themselves, herself? Do you 
feel isolated by where you are at? Quite frankly, with your 
background, you may be isolated. I don't know anybody else in 
the whole place who has got more background to do what you are 
doing and what you do compared to everybody else. Quite 
frankly, the rest of them scare the heck out of me. My question 
is, your interaction with other folks within your agency, how 
has it been so far? What are your concerns?
    Mr. WALSH. I am flattered with your opening description of 
me. Thank you for that.
    I worked for some very large private sector organizations 
like General Electric and a wide variety of others. As we know, 
there is siloing in every organization, be it private sector or 
public sector. I, frankly, was expecting more, Congressman. 
But, for instance, I came to the Hill to speak to you today 
directly from a weekly staff meeting that the chief of staff 
has with all of the--my level associate administrators for each 
and every part. We go around the room and try and keep each 
other informed. I am very encouraged, bluntly, on the lack of 
siloing, at least my access to each people at my level, the 
Deputy Administrator, and the Administrator herself.
    Now, to your point on whether that siloing ends up becoming 
duplicative, I look forward to learning more and more about 
that and reporting to all of you on the types of things that I 
see. But early returns from my experience are I have access to 
anybody at my level that I wish to. In fact, they welcome me 
with lunches and other types of informational sessions. I have 
access to the Administrator, the Deputy Administrator, the 
chief of staff, whenever I need to. I see no siloing as far as 
behavior. But I look forward to learning more and more about--I 
hesitate to use the term, but more and more about commonality 
amongst our efforts.
    Mr. LUETKEMEYER. Very good. I see my time has expired.
    Thank you, Mr. Chairman.
    Mr. BOST. Thank you.
    And I would like to take another 5 minutes if I can. Just a 
couple more questions. And these are directed toward Mr. 
Williams.
    All right. We are going to give you a chance to throw 
somebody under the bus. Okay? How well do the agencies provide 
the SBA with the information that they need to produce the 
yearly SBIR reports?
    Mr. WILLIAMS. How well do they do it?
    Mr. BOST. How well do they provide you with that 
information?
    Mr. WILLIAMS. Well, so what has happened, and the fault 
goes on all agencies and all sides, and SBA is part of that, is 
that we have been working over the last probably 2 years--so I 
came in December 1--2 to 3 years on developing a more automated 
upload system called SBIR.gov where we will pull in all the 
information. In the past, we almost got information in access 
form--Excel documents. There was a real challenge of getting 
that information. It was easy to put it into a report, but our 
goal was to actually pull that information up on our Web site. 
Now realtime you can look at data up until 2014 and kind of do 
mapping and tracking so you could look at what was in 
Massachusetts, Illinois, how many awards, what the companies 
were, and things like that. Our focus over the last year since 
I have been there is to work with each agency's system because 
each agency has a different database system, a different 
contractor. That effort was a lot harder than I thought. It 
takes money and resources on both our side and their side to 
get everyone to kind of do this different way of uploading 
information in more realtime.
    We made a lot of progress there. We are behind on the 
reporting now taking that data and actually put it into 
documental reporting. We hope to have some of that to you 
pretty soon. It is moving through our agency. But my first goal 
was to be able to get that information transparently out on our 
SBIR.gov so everyone could see it as opposed to focus on 
reports.
    Mr. BOST. Which leads to the other question. Because that 
was a major concern of GAO's. Okay? It is you are required by 
law to give the annual reports. So the SBIR reports right now 
that we are missing are 2013, 2014, 2015.
    Mr. WILLIAMS. Correct.
    Mr. BOST. How quick do you think that we could actually get 
those and be in compliance with the law?
    Mr. WILLIAMS. 2013 I think can be--well, so it is hard to 
put a date because the way those work is then we release them 
to OMB, OMB releases them to the agencies. Agencies comment 
back, and then we release them to the public. There are a lot 
of dates that aren't in my control. I am uncomfortable saying 
it will be by this date, but we are working on it. We are close 
to releasing them, the 2013 to OMB, and then, shortly after 
that, depending on what the comments back from the agencies 
are, it can go faster or----
    Mr. BOST. Maybe that is something that you can give to our 
Committee as to what we can do to help you get that done 
because it is very hard to explain to the general public----
    Mr. WILLIAMS. Right.
    Mr. BOST. --that we have in law that you will be reporting. 
Then whenever these investigations come out, and all of a 
sudden, they are 2, 3 and 4 years behind, that we haven't done 
it. So----
    Mr. WILLIAMS. I would be glad to follow up with the 
Committee on that.
    Mr. BOST. Let's shift. The Department of Commerce operates 
regional cluster initiatives, which received about $10 million 
in fiscal year 2015 and $15 million in fiscal year 2016. The 
SBA also operates a cluster program. And the Small Business Act 
provides SBA with duplicating the programs of other agencies. 
You can't--why does the SBA continue to allocate funds to this 
program when it appears that that would be duplicative from the 
Commerce program?
    Mr. WALSH. Cluster is not--right?
    Mr. WILLIAMS. It is not under----
    Mr. WALSH. Cluster is--the cluster program at SBA is not 
part of OII. But I will look forward to researching it and 
getting back to your team, if you like.
    Mr. BOST. That is what we are needing to try to find out 
because our understanding is we are not supposed to be 
duplicative with this and----
    Mr. WALSH. That is an admirable goal. We will gather more 
data and get back to you, but OII is not the administrator of 
the cluster program at SBA.
    Mr. BOST. Okay.
    With that, I will yield.
    Mr. Moulton, do you have any more questions?
    Mr. MOULTON. Mr. Chairman, I just have one additional 
question.
    Mr. Walsh, I realize that there are concerns regarding 
proprietary information related to SBIR, STTR programs, 
particularly when the SBIR grant is related to the Department 
of Defense. As we begin the reauthorization process, it is 
important that we know more about the effectiveness of this 
program so that we can understand what parts need to be 
reauthorized. Where traditional metrics, such as how many jobs 
are created, revenues created, or companies created, are not 
applicable, we look for output measures instead, like papers 
and patents. Where SBA programs funded by NASA and DOD might be 
effective but not provided for--but not provide traditional 
metrics, what is the measure we should be using to judge the 
success of these programs?
    Mr. WALSH. Congressman, I think you have touched on one of 
the questions that in my time in this job I look to get more 
traction on. I think that you can ask a wide variety of people, 
even amongst my team, and potentially get different answers. 
Not that that is wrong, but you can get different answers.
    To your point, clearly, one obvious metric would be the 
number of SBIR grants that become commercializable companies 
with employees, products, and sales. Based upon an Air Force 
study using that as an indicator of SBIR grants writ large, 
about 48 percent of SBIR grants turn and generate revenue. Now 
that is a second broader interpretation.
    Mr. MOULTON. Sorry, what percent?
    Mr. WALSH. Forty-eight percent of SBIR grants generate 
revenue.
    Now, I have said that specifically because that is not 
necessarily selling products to companies----
    Mr. MOULTON. Sure.
    Mr. WALSH. --with a product, per se. It is getting a 
license for your technology and a wide variety of other ways to 
generate revenue. I personally, again, 30 days in, prefer 
revenue as a judgment yardstick to continue to look at how many 
SBIR grants turn into an entity that either licenses its 
technology, is sold as a full entity to another larger entity, 
be it commercial entity, or has a contractual revenue-
generating relationship with DOD or some other force in the 
company, or has in the private sector a commercializable 
product that sells itself to customers and is paid for? 
Although that sounds very broad, that would be my personal 
yardstick I am looking to apply against SBIR grants. Hopefully 
we will have a robust percentage of those that generate 
revenue.
    Mr. MOULTON. Okay.
    Mr. Williams or Ms. Fendler, do you have any other comments 
on that?
    Mr. WILLIAMS. No. Those are the marks we look at. It is, 
you know, spinouts, licensing, revenue dollars, and any 
potential job growth are all good measures. The challenge is 
they all take time, you know, from the investment to when you 
hit those marks. We have to measure them over time. But that is 
something that we are responsible to do, and we are taking 
action to try to do a better job with that.
    Mr. MOULTON. Okay.
    Thank you very much, Mr. Chairman, and I yield back.
    Mr. BOST. Mr. Luetkemeyer, do you need 5 minutes?
    Mr. LUETKEMEYER. Thank you, Mr. Chairman.
    Yesterday, we had also someone in here, and they were 
authorized to have 30 different people help them with the trade 
portion of SBA. They only had 19. It begs the question, number 
one, who pulled 30 out of the air? Was it the Congress said, 
``Well, we need to have 30,'' or was it the SBA who said, ``We 
need 30"? And if so, do we need 30? Are we underfunding or 
overfunding? Are they overworked, underworked? As a result, we 
got into some interesting conversations and found out that they 
really don't even do much with the 19 they have got.
    My question to you, sir, is, in your brief time there, have 
you looked at the personnel? You already commented you like 
what you have--but I am looking at the numbers--to adequately 
do your job. Do you need more? Do you need less? Are you 
overemployed? Underemployed? What do you see, and where do you 
see it going?
    Mr. WALSH. I might remind the Committee that I worked for 
Jack Welch at GE. And Jack Welch was famous for saying, ``You 
can always do more with less.'' I am not quoting nor am I 
channeling Chairman Jack Welch in this conversation. But it is 
certainly one of my goals during this coming year to employ 
every possible technology--and I use that term in a pretty 
broad perspective--every possible use of technology to make the 
folks on my team as productive as possible in the hours in the 
office and when they are traveling. Now, that can be something 
as small as perhaps maybe a better BlackBerry. I use that 
advisedly. I got my government-issued BlackBerry, and it is 
great to see that technology again. I say that with a small 
smile on my face. But, no, using technology that makes them 
more productive in the office and on the road. Technology to 
process the paperwork that we get more rapidly and to keep that 
paperwork in the cloud in a digital way more efficiently and 
more accessibly by the other elements of SBA or other elements 
of the government. And then, perhaps most importantly, because 
the question thematically has been this way, tracking, using 
technology to track what happens, both with our SBIR partners 
at the agencies, the companies that get SBIR grants, the 
companies that get SBIC investment, and the accelerators and 
innovators that we touch every year.
    Now, technology is something that you can lean upon too 
hard sometimes in my professional career, I have seen, and the 
output is not that appealing. Technology is not a solution, but 
it is a way to make each and every one of the 80 or so people 
on my squad be more productive.
    As far as the initial part of your question, I like our 
number. We have a few open reqs, but I think we have an 
extraordinarily productive group of people. I like the team I 
have got, and I think we are going to have a really productive 
2016 with them.
    Mr. LUETKEMEYER. Along those lines, you are talking about--
one of the weaknesses that GAO pointed out in their report was 
IT, informational protections. In your particular area, do you 
have that problem, or do you see that as a weakness?
    Mr. WALSH. I do not see it as a problem or a weakness. 
However, vigilance is our middle name. I refuse under my watch 
at OII to let our vigilance on the concern and protection of 
the data drop. It is something we think about every single day 
and we have meetings about. So, like you, I think that 
vigilance on our data is a primary concern.
    Mr. LUETKEMEYER. You haven't been there a long time, but I 
am sure you have kind of gone through everything. What do you 
see as the weaknesses of your agency that you oversee, the 
departments you oversee, and what are your solutions at this 
point, or have you got some? And I have got about a minute and 
a half left. So----
    Mr. WALSH. I will give you one brief example.
    Mr. LUETKEMEYER. Yeah.
    Mr. WALSH. We have not attracted venture capital companies 
to the SBIC program in as robust a fashion as I would like. I 
spent a lot of time in the venture capital industry prior to 
arriving here. We all know the major venture firms out in 
Silicon Valley, et cetera. But there are many venture firms 
throughout the U.S. that invest in great companies in States 
represented by you that I would like to reach out more to. Part 
of my job, and even when I ran a publicly traded company as 
CEO, part of my job was in sales. So I perceive that part of my 
job in this coming year is to travel to those States and to 
those venture capital companies and show them that SBICs are 
open for business. It is an efficient way to add leveraged 
capital to a venture capital fund that is investing in American 
businesses, both in debt and equity. I think if you look back 
at my year, it is a sprint, but I would like to look back on 
the track and see that I made some progress in that specific 
arena.
    Mr. LUETKEMEYER. Well, that is a fabulous idea. I was going 
to elaborate on that. Can you--you would partner--have the 
SBICs partner with the venture capitalists on the outside, 
which they do not do now. Is that what you are trying to say?
    Mr. WALSH. No. We have a new type of SBIC--I say ``new.'' 
It is a new initiative in SBIC. It is called Early Stage Fund. 
It is structured financially so that the interest is paid out 
on the back end of the decade of the interest, which means that 
the first 5 years, the interest fee--interest payments are not 
made. They are paid in the second 5 years, which means that a 
venture capital fund, like, you know, Andreessen Horowitz, some 
of the famous ones that we know out in the West Coast or in ZIP 
Codes that currently are not served by traditional venture 
funding, can take those dollars and invest in equity, in 
equity, in innovative and transformative companies and not have 
to pay the interest fees which traditionally SBICs have. Today 
SBIC is really a debt shop. We loan money to professional 
investors, and they put it out to companies that can afford to 
pay the interest. With this new early stage investment fund, we 
can get with venture funds who will invest in companies that 
are pre-revenue but have a great product and a great future 
ahead of them. That is part of my sales job is to get out and 
get that message out there.
    Mr. LUETKEMEYER. Impressive. Thank you very much for your 
service and willingness to do what you do. Thank you, sir.
    Mr. BOST. With that, Mr. Moulton has no other questions.
    And, Mr. Luetkemeyer, do you have--okay.
    With that, again, we want to say thank you to Mr. Walsh.
    I want to thank you each for being here.
    The hearing in which we discussed GAO last week showed 
recurrent and systemic problems with the management at SBA. 
These deficiencies must be addressed because so many 
entrepreneurs depend on services that you provide through the 
SBA. We must work together to ensure that good incentives, like 
the SBIR, STTR, and SBIC programs, continue to help small 
businesses stimulate the economy, create jobs, and rebuild our 
country.
    I sincerely hope that you, Mr. Walsh, in your new position, 
and all of your colleagues at the SBA, will be willing to work 
together with us in Congress in achieving that goal.
    I ask unanimous consent that the members have 5 legislative 
days to submit statements and supporting material for the 
record.
    Without objection, so ordered.
    The hearing is now adjourned.
    [Whereupon, at 3:53 p.m., the subcommittee was adjourned.]
                            A P P E N D I X


 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]  

    Chairwoman Radewagen, Ranking Member Moulton and 
distinguished members of the Subcommittee, thanks for inviting 
me to discuss the SBA's Office of Investment and Innovation. 
I'm pleased to detail our flagship programs--Small Business 
Innovation Research (SBIR)/Small Business Technology Transfer 
(STTR) and the Small Business Investment Companies (SBIC)--as 
well as our successful support for Accelerators and Incubators.

    I want to begin with a little background on me. I joined 
the SBA a month ago. Prior to my arrival, I was a venture 
capitalist, angel investor and corporate director for a number 
of high growth startups and more mature companies in a wide 
variety of industries. In addition, I spent a bulk of my career 
in the technology arena--and served as CEO for a business to 
business content and ecommerce company during the late 1990s. 
Having spent over thirty years in the private sector, I know 
the importance of this committee and the contributions that 
programs in the Office of Investment and Innovation (OII) 
offer. I'm honored to testify before this distinguished group 
and to serve as the head of OII.

    One of the best ways to communicate the power of our 
programs is through examples. One of those is a San Francisco 
startup called Lift Labs. We all know about the effects of 
Parkinson's disease. Lift Labs created an ``anti-tremor'' spoon 
that cancels up to 70% of the hand tremors associated with the 
disease. With this spoon, an affected individual is able to eat 
with dignity and confidence. This life changing product 
received early stage capital from the National Institute of 
Health's SBIR program. This early influx of capital allowed 
Lift Labs to take its product from the research and development 
stage to the market. Today, Lift Labs spoon can be purchased on 
Amazon.

    Successful trajectories like these are a priority for my 
Office in SBA. Last year alone through my Office's flagship 
programs, the U.S. government provided $2.5 billion to over 
5,000 SBIR and STTR projects and our 303 Small Business 
Investment Companies investment partners managed over $25 
billion in private capital and SBA guaranteed leverage and 
commitments, benefiting over 1200 small businesses.

    Our SBIR/STTR program, labeled ``America's Seed Fund'', is 
a key pillar in the federal government's strategy to provide 
seed capital to talented entrepreneurs in science, technology 
and engineering. Since its inception in 1982 the program has 
awarded over 50,000 awards with $30B in funding to early stage 
companies. SBIR/STTR funded companies have made lasting 
contributions to the advancement of science and industry and 
will continue to do so. Companies like Lift Labs, with SBIR 
support, look to be the next potential big employers like past 
SBIR recipients--companies like Qualcomm, Biogen, iRobot, and 
Symantec.

    Our Growth Accelerator Competition enters its third year. 
To date, this program has invested nearly $7 million in 138 
accelerators across the United States. Accelerators in 43 
states, including the District of Columbia and Puerto Rico, 
have received awards through this program. Last year alone, we 
awarded 88 prizes to accelerators at $50,000 each. In the 
coming year, resources made available in the FY 16 Omnibus 
appropriation will allow us to continue this valued program. 
Our Growth Accelerator Competition plays a crucial role in the 
entrepreneurial ecosystem by enhancing the effectiveness of 
organizations committed to providing financial and technical 
assistance to American start-ups and small businesses. And 
speaking of ``Buses'', we plan to continue our SBIR bus tour 
with SBIR partners including incubators, in 21 states later 
this year, spreading the good work about their work and their 
potential.

    The Small Business Investment Company's history is equally 
rich. It channels long-term investment capital to America's 
small businesses. Since it was created in 1958, over $80 
billion has been invested helping finance 170,000 American 
small businesses. In FY 15 the SBICs invested over $6.2 
billion, in total financing between the SBA leverage and our 
fund partners, to 1,210 portfolio companies which created or 
sustained roughly 130,000 jobs. That is a 15% increase in 
financings compared with FY 14. Each year we acknowledge two 
SBICs of the year. In 2015, these awards when to Monroe Capital 
of Chicago, IL which has had three licensed SBICs, and has 
invested $260 million in 33 small businesses that employ. The 
second SBIC of the Year for 2015 was NewSpring Capital from 
Radnor, PA. NewSpring has had three licensed SBIC funds, and 
has invested in 55 companies.

    As head of the SBA's Office of Investment and Innovation, I 
am committed to ensuring that more and more of our nation's 
innovators and investors know about our programs and know how 
to access them. The SBIR/STTR and SBIC initiatives are 
foundational components of our mission. All of us look forward 
to increasing success and demonstrable outcomes from the access 
to capital we provide to America's most exciting arena: Small 
Businesses.