Washington, DC - U.S. Senators Chris Coons (D-DE), Cory Booker (D-NJ), Kirsten Gillibrand (D-NY), Patty Murray (D-WA), and Gary Peters (D-MI) today introduced the Scale-Up Manufacturing Investment Company (SUMIC) Act of 2015, legislation that increases access to capital for entrepreneurs looking to scale-up and commercialize their advanced manufacturing innovations.
“America’s small and medium-sized companies are among the most innovative in the world and are critical drivers of our economy,” Senator Coons said. “Too often, though, young manufacturing companies can’t access the same resources available to large, established firms, forcing them to move manufacturing and jobs overseas to secure the investment they need to thrive. We must do everything we can to help these innovative companies grow and prosper here at home so they can create American jobs and grow our economy. I’m proud to join Senator Booker in this effort and support his Scale-Up Manufacturing Company Act of 2015.”
Lack of access to capital pushes emerging manufacturing entrepreneurs to move their advanced manufacturing technologies abroad to other nations that provide financing opportunities for small businesses looking to commercialize their innovations. Not only does this migration drain the United States of innovative manufacturing capabilities, it also causes us to lose out on high-paying, high-skilled manufacturing jobs that accompany the commercialization of new ideas. The U.S. must do more to keep these jobs and opportunities for innovation here at home.
Not only do small businesses employ more than 50 percent of the U.S. workforce, they have also generated over 65 percent of net new jobs since 1995. Small businesses have also proven themselves to be hotbeds of innovation. To survive in today’s increasingly competitive economy, entrepreneurs often must expand quickly, growing on their own or in collaboration with larger firms to help scale-up their innovations into commercialized products which often require highly complex, advanced manufacturing capabilities that demand more time and capital to scale than nonproduction firms. However, our nation’s financing mechanisms have not kept up with this changing landscape and make it difficult for these companies to find the capital needed to demonstrate viability of their technology at a commercial scale.
The SUMIC Act creates a program that allows private investment firms to leverage funds provided by the government to help emerging manufacturers commercialize their products. The program, modeled on the Small Business Administration’s (SBA) Small Business Investment Companies (SBIC) program, would allow approved participating investment firms to invest in securities and issue debentures to raise capital that would then be invested into emerging manufacturers’ businesses. Any fees, interest, and profits received from the debentures and securities investments would offset the costs of the program
The SUMIC Act is supported by the following organizations:
· Information Technology and Innovation Foundation
· National Venture Capital Association
· Association for Corporate Growth
· Small Business Investor Alliance
· New Jersey Manufacturing Extension Program
· Rutgers University’s Business School in Supply Chain Management
· New Jersey Business Incubation Network
· NJ Innovation Institute
· New Jersey Business & Industry Association