I recently had the opportunity to participate in Inc.'s first-ever Hire Power Awards event in Washington, D.C. The event was a testament to the power of American entrepreneurship and the role that it plays in driving job creation and innovation in a wide array of industries. It also highlighted the importance of working together to expand our nation's entrepreneurial infrastructure to create the next generation of Hire Power companies.
One of the major challenges we face today is that promising new businesses in rural and industrial communities are struggling to get the capital, investment and counseling they need to grow. For example, today nearly 70 percent of venture capital financing goes to just three states: California, Massachusetts and New York.
We need to change that. We need a more inclusive vision of entrepreneurship that expands access and opportunity to more regions of the country. Just look at the top 100 Inc. Hire Power honorees. They came from more than 30 states and all 25 industries that Inc. covered. These entrepreneurs are critical to our economic growth and our long-term global competitiveness. And we need to expand the entrepreneurial playing field to make sure that more new and young businesses in these communities can replicate their success.
Patient Growth Capital: One of the most important tools we have at the Small Business Administration (SBA) to reach high growth entrepreneurs is the Small Business Investment Company (SBIC) program. This program is authorized to invest up to $3 billion annually in funds that deploy this capital to high growth entrepreneurs.
In the past, the program was way too cumbersome and underutilized, getting out an average of only about $750 million a year. We changed that. And today this streamlined program is operating as a model public-private partnership. In fact, it had its third consecutive record-breaking year in 2012. And as Inc. recently reported, we are now using the SBIC program to create new platforms to fill market gaps for early stage investing, which is often known as the "valley of death," and to increase investment to promising companies in economically disadvantaged regions of the country. These new platforms are attracting blue chip fund managers and investors.
New Revenue Streams: At the SBA, we also oversee the federal government's small business contracting program. This program drives nearly $100 billion a year to small businesses, creating important revenue streams and growth opportunities. However, we know that interacting with the federal government can be time consuming, particularly when you have a business to run. That's why we've worked to make it easier and more efficient. For example, we recently launched a new pilot called RFP-EZ, an online marketplace that streamlines the government contracting process, making it simpler for small businesses to find and bid on low-dollar contracts from federal agencies.
We also have implemented QuickPay, so that small businesses (both prime and subcontractors) who do work for the federal government get paid in just 15 days. This means companies can put that money toward working capital, expanding their businesses and marketing their products.
We also are using our government contracting experience and connections to create more opportunities in commercial supply chains through tools such as Supplier Connection, an online portal created by the IBM Foundation that makes it easier for small businesses to connect to large companies. And to support these suppliers, the SBA is offering streamlined working capital programs and counseling.
We know that entrepreneurs and start-ups punch above their weight. By expanding entrepreneurial opportunities to more regions, and providing the right tools and environment for these businesses, we can make sure that more high growth firms in communities across the country can increase their sales, grow our economy and one day be honored as part of Inc.'s Hire Power 100.