Carta pushes SBA to bolster fund managers and innovators

Carta pushes SBA to bolster fund managers and innovators

Author: The Carta Policy Team
Read time: 4 minutes
Published date: April 4, 2025

Topline

Carta testifies in Congress on initiatives to expand private capital

Carta testified before the House Small Business Committee to make the case that startups, growth-stage businesses, and the investors that back them are this nation’s economic and innovation engine. Private capital provides entrepreneurs with long-term, risk-forward capital to launch and build companies.

This has fueled an innovation ecosystem that has:

The charge: We need to not only bolster this engine, but broaden it—to more investors, more companies, more communities. Access to capital is a gating issue for startups and small businesses. To broaden access to capital, we need to broaden the investor ecosystem.

Why investment matters: Regional capital can create regional economic hubs. This starts the flywheel. Emerging and regional managers tend to invest early, invest locally, and invest diversely. These investors back entrepreneurs in the region. And these entrepreneurs launch and build companies, which attract employees to the region. These employees earn income and develop skills, further broadening the ecosystem in which to invest.

Path forward & why it matters: To do this—in addition to capital markets and tax policy we advocate for in other forums—policymakers can bolster the Small Business Association’s Small Business Investment Company Program, which enables venture capital and private equity funds that acquire an SBIC license to borrow additional capital from the SBA to deploy into the ecosystem. This public-private partnership leverages professional investment managers to invest in more entrepreneurs across the country and broaden the innovation ecosystem.

This message was met with bipartisan support at the Small Business Committee hearing, and we need to keep pushing as policymakers scrutinize—and cut—spending and more funds seek to leverage the SBIC program.

Anthony Cimino, Head of Policy at Carta, speaks on the economic engine of private capital.

Liberation Day: Trump unveils sweeping levies in move to reshape global trade

This week, President Trump announced a comprehensive tariff regime in a dramatic shake-up of U.S. trade policy. Here are a few highlights:

Why it matters: The day after the announcement, markets posted the biggest drop since 2020, the early days of the pandemic. A number of countries have already announced steep retaliation initiatives and have discouraged their companies from investing in the U.S.

The impacts on the broader startup ecosystem may not be as visible, but there will be significant impacts. If conditions continue, companies will likely face higher costs and suffer from downstream effects of any resulting macroeconomic contraction, both of which may make fundraising more challenging and put pressure on valuations. Volatile market conditions could chill IPOs and further stunt exit opportunities.

What’s next: The extent of the import hike and their longer-term impacts are far from uncertain. Trump has walked back previous tariff hikes. What’s also uncertain is how long the traditionally pro-trade Republican base will continue to support the president’s policies, which have sent markets into turmoil and will likely lead to higher costs across the board for their constituents. This week, several GOP Senators broke ranks and voted with Democrats to reverse Trump’s Canadian tariffs. This vote was more symbolic and will not pass the House, but it shows fault lines. Sen. Chuck Grassley is leading bipartisan legislation to give Congress more power over tariff policy. This fracturing is likely to continue as the impacts from Trump’s tariff overhaul continue.

Knock-on effects: Beyond the economic turmoil, the growing split in the Republican conference—their willingness to vote against the President on tariffs, for instance—may make it harder for the president to hold the conference together on bigger-ticket items such as tax reform, where almost every Republican vote will be needed.

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