Remove Fed’s 51 Percent Equity Definition for Women Owned Businesses

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Problem

According to Dr Cindy Gordon, CATA National Spokesperson, CEO, SalesChoice, an AI, Saas company, and a Sara Kirke Award winner, “ We are concerned that government policy places an emphasis on “women owned” business, defined as 51 percent equity in the company, rather than on women-led or women-founded companies and how this guidance affects access to growth capital and related resources.”

While in the early stages of setting up a company, a 51 percent rule makes some sense, company owners are often in the position where they have to seek equity-based investment to get the capital needed for rapid growth. Given that there are proportionally few women investors in the market (estimated at about 14% of the total), this places women-led and founded companies at a disadvantage.

We also have a challenge of retaining women in the technology sector, and to achieve Canada’s goals for innovation, it is imperative we ensure women are not disadvantaged.

The unintended result is to reduce the capital supply pool to women led businesses or to force owners to opt to dilute their company and thus loose their status for extra consideration for contracts and export opportunities.

Solution
The federal government needs to fully open access to international trade promotion, procurement and related growth resources to women-led or women founded companies, rather than excluding women-owned businesses that are not at least 51% owned, managed and controlled by one or more women.

Personal story
As a not for profit organization, CATAAlliance is advancing Core Policy Planks linked to advocacy Campaigns and recommendations which will address legislative challenges and obstacles as part of boosting Canada’s ranking as a Competitive Innovation Nation. The 51 percent rule is an unnecessary obstacle to women in tech business creation and growth.



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