SOAR Act

II 116TH CONGRESS 1ST SESSION S. 2149 To amend the Small Business Act to create a program to provide funding for organizations that support startup businesses in formation and early growth stages by providing entrepreneurs with resources and services to produce viable businesses, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 17, 2019 Mr. BOOKER introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To amend the Small Business Act to create a program to provide funding for organizations that support startup businesses in formation and early growth stages by pro- viding entrepreneurs with resources and services to produce viable businesses, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Startup Opportunity 4 Accelerator Act of 2019’’ or the ‘‘SOAR Act’’. 5 SEC. 2. FINDINGS. 6 Congress finds that— 7 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 2 •S 2149 IS (1) startups have contributed greatly to the 1 United States economy, with research showing that 2 between 1982 and 2011, businesses 5 years or 3 younger were responsible for nearly every net new 4 job created; 5 (2) startups face common challenges as they 6 seek to transform their ideas into successful, high- 7 growth businesses; 8 (3) 4 metropolitan areas in 3 States—the San 9 Francisco Bay Area, New York City, Boston, and 10 Los Angeles—receive nearly 75 percent of all ven- 11 ture capital investment, which is a critical source of 12 funding for high-growth startups; 13 (4) of startups that receive venture capital 14 funding, 2 percent are African-American-owned, 6 15 percent are Latino-owned, and only 13 percent are 16 owned solely by women; 17 (5) incubators and accelerators are new models 18 of growth that drive innovation by connecting entre- 19 preneurial individuals and teams to create viable 20 business ventures and social initiatives; 21 (6) incubators and accelerators support prom- 22 ising startups through partnerships, mentoring, and 23 resources connecting them with seasoned entre- 24 preneurs; 25 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 3 •S 2149 IS (7) the goal of an incubator or an accelerator 1 is to help create and grow young businesses by pro- 2 viding them with necessary financial, technical, and 3 industry support and financial and technical serv- 4 ices; and 5 (8) startups offer unique opportunities for 6 growth and development for women, minority, and 7 veterans to become successful entrepreneurs and 8 leaders in new and developed fields. 9 SEC. 3. FUNDING FOR ORGANIZATIONS THAT SUPPORT 10 STARTUP BUSINESSES. 11 (a) IN GENERAL.—The Small Business Act (15 12 U.S.C. 631 et seq.) is amended— 13 (1) by redesignating section 49 (15 U.S.C. 631 14 note) as section 50; and 15 (2) by inserting after section 48 the following: 16 ‘‘SEC. 49. FUNDING FOR ORGANIZATIONS THAT SUPPORT 17 STARTUP BUSINESSES. 18 ‘‘(a) DEFINITIONS.—In this section— 19 ‘‘(1) the term ‘accelerator’ means an organiza- 20 tion that— 21 ‘‘(A) frequently provides, but is not exclu- 22 sively designed to provide, seed investment in 23 exchange for a small amount of equity; 24 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 4 •S 2149 IS ‘‘(B) works with a startup for a predeter- 1 mined amount of time; 2 ‘‘(C) provides mentorship and instruction 3 to scale businesses; or 4 ‘‘(D) offers startup capital or the oppor- 5 tunity to raise capital from outside investors; 6 ‘‘(2) the term ‘disability’ has the meaning given 7 the term in section 3 of the Americans with Disabil- 8 ities Act of 1990 (42 U.S.C. 12102); 9 ‘‘(3) the term ‘eligible entity’ means an organi- 10 zation— 11 ‘‘(A) that is located in the United States; 12 ‘‘(B) the primary purpose of which is to 13 support new small business concerns; and 14 ‘‘(C) that is often classified as an accel- 15 erator; 16 ‘‘(4) the term ‘new small business concern’ 17 means a small business concern that has been in op- 18 eration for not more than 5 years; 19 ‘‘(5) the term ‘small business concern owned 20 and controlled by socially and economically disadvan- 21 taged individuals’ has the meaning given the term in 22 section 8(d)(3)(C); and 23 ‘‘(6) the term ‘State’ means any State of the 24 United States, the District of Columbia, the Com- 25 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 5 •S 2149 IS monwealth of Puerto Rico, and any territory or pos- 1 session of the United States. 2 ‘‘(b) FUNDING.— 3 ‘‘(1) IN GENERAL.—Not later than 1 year after 4 the date of enactment of this section, the Adminis- 5 trator shall develop and begin implementing a pro- 6 gram to award cash grants of not more than 7 $100,000 to eligible entities to support new small 8 business concerns. 9 ‘‘(2) USE OF FUNDS.—A grant under this sec- 10 tion— 11 ‘‘(A) may be used for construction costs, 12 space acquisition, and programmatic purposes; 13 and 14 ‘‘(B) may not be used to provide capital or 15 professional services to new small business con- 16 cerns directly or through the subaward of 17 funds. 18 ‘‘(3) DISBURSAL OF FUNDS.—In disbursing 19 funds under this section, the Administrator may use 20 incremental or scheduled payments. 21 ‘‘(c) APPLICATION.— 22 ‘‘(1) IN GENERAL.—An eligible entity desiring a 23 grant under this section shall demonstrate that the 24 eligible entity will use the grant to provide assistance 25 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 6 •S 2149 IS to not less than 10 new small business concerns per 1 year. 2 ‘‘(2) REQUIREMENTS.—In soliciting applica- 3 tions and awarding grants to eligible entities under 4 this section, the Administrator shall employ a 5 streamlined and inclusive approach that— 6 ‘‘(A) widely publicizes funding opportuni- 7 ties to a broad audience, including through the 8 use of digital resources such as the website of 9 the Administration and social media; 10 ‘‘(B) utilizes an easily accessible submis- 11 sion process or platform; 12 ‘‘(C) shall make every effort to minimize— 13 ‘‘(i) the use of forms, detailed budg- 14 ets, supporting documentation, or written 15 submissions; and 16 ‘‘(ii) any other burdensome require- 17 ment; 18 ‘‘(D) focuses on solution-based approaches 19 and results-based outcomes; 20 ‘‘(E) encourages innovation; and 21 ‘‘(F) allows proposals or pitches to be pre- 22 sented using various formats or media. 23 ‘‘(d) CRITERIA.—The Administrator shall establish 24 criteria for a grant under this section shall give priority 25 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 7 •S 2149 IS to eligible entities that are providing or plan to provide 1 to new small business concerns— 2 ‘‘(1) office, manufacturing, or warehouse space, 3 including appropriate operations infrastructure; 4 ‘‘(2) access to capital either directly from the 5 eligible entity (using amounts other than the 6 amounts provided under the grant) or through guid- 7 ance and contacts for acquiring capital from outside 8 investors; 9 ‘‘(3) access to professional services either di- 10 rectly from the eligible entity (using amounts other 11 than the amounts provided under the grant) or 12 through guidance and contacts for acquiring profes- 13 sional services, including accounting and legal serv- 14 ices; or 15 ‘‘(4) a formal structured mentorship or develop- 16 mental program that assists new small business con- 17 cerns with building business skills and competencies. 18 ‘‘(e) CONSIDERATIONS IN CHOOSING RECIPIENTS.— 19 In determining whether to award a grant under this sec- 20 tion to an eligible entity, the Administrator shall take into 21 account— 22 ‘‘(1) for eligible entities that have in operation 23 a program to support new small business concerns, 24 the record of the eligible entity in assisting new 25 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 8 •S 2149 IS small business concerns, including, for each of the 3 1 full years before the date on which the eligible entity 2 applies for a grant under this section— 3 ‘‘(A) the retention rate of new small busi- 4 ness concerns in the program of the eligible en- 5 tity; 6 ‘‘(B) the average period of participation by 7 new small business concerns in the program of 8 the eligible entity; 9 ‘‘(C) the total, average, and median capital 10 raised by new small business concerns partici- 11 pating in the program of the eligible entity; and 12 ‘‘(D) the total, average, and median num- 13 ber of employees of new small business concerns 14 participating in the program of the eligible enti- 15 ty; 16 ‘‘(2) for all eligible entities— 17 ‘‘(A) the number of new small business 18 concerns assisted or anticipated to be assisted 19 by the eligible entity; 20 ‘‘(B) the number of new small business 21 concerns applying or anticipated to apply for 22 assistance from the eligible entity; 23 ‘‘(C) whether the program of the eligible 24 entity provides or would provide assistance to 25 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 9 •S 2149 IS individuals in gender, racial, or ethnic groups 1 underrepresented by existing programs to assist 2 new small business concerns; and 3 ‘‘(D) other metrics determined appropriate 4 by the Administrator; 5 ‘‘(3) the need in the geographic area to be 6 served by the program to be carried out using the 7 grant for additional assistance for new small busi- 8 ness concerns, if the area has sufficient population 9 density, as determined by the Administrator; 10 ‘‘(4) the level of experience of the entrepre- 11 neurial leadership of the eligible entity; and 12 ‘‘(5) the ability of the eligible entity to use and 13 leverage local strengths, including human resources, 14 infrastructure, and educational institutions. 15 ‘‘(f) REQUIREMENT TO AWARD GRANTS TO CERTAIN 16 ACCELERATORS.—In order to promote diversity in entre- 17 preneurship, the Administrator shall award not less than 18 50 percent of amounts appropriated for grants in a given 19 fiscal year to— 20 ‘‘(1) accelerators located in an area described in 21 subparagraph (A), (B), or (C) of section 3(p)(1); 22 and 23 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 10 •S 2149 IS ‘‘(2) accelerators for which not less than 50 1 percent of the small business concerns served by the 2 accelerator are small business concerns— 3 ‘‘(A) owned and controlled by socially and 4 economically disadvantaged individuals; 5 ‘‘(B) owned and controlled by women; or 6 ‘‘(C) that are not less than 51 percent 7 owned by one or more— 8 ‘‘(i) Native Americans; 9 ‘‘(ii) individuals participating in the 10 Transition Assistance Program of the De- 11 partment of Defense; 12 ‘‘(iii) individuals who— 13 ‘‘(I) served on active duty in any 14 branch of the Armed Forces, includ- 15 ing the National Guard and Reserves; 16 and 17 ‘‘(II) were discharged or released 18 from such service under conditions 19 other than dishonorable; 20 ‘‘(iv) formerly incarcerated individ- 21 uals; or 22 ‘‘(v) individuals with a disability. 23 ‘‘(g) MATCHING NONPUBLIC FUNDING REQUIRE- 24 MENT.— 25 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 11 •S 2149 IS ‘‘(1) IN GENERAL.—An eligible entity receiving 1 a grant under this section shall obtain funds from 2 a private individual or entity (including a for-profit 3 or nonprofit entity) that are— 4 ‘‘(A) for the same purposes as a grant may 5 be made under this section; 6 ‘‘(B) used to carry out the program of the 7 eligible entity carried out using the grant under 8 this section; and 9 ‘‘(C) in an amount that is not to be less 10 than 50 percent of the amount of the grant 11 under this section. 12 ‘‘(2) FORM OF NON-FEDERAL SHARE.—Not 13 more than 25 percent of the funds obtained under 14 paragraph (1) may be in the form of in-kind con- 15 tributions. 16 ‘‘(h) CONSEQUENCES OF FAILURE TO ABIDE BY 17 TERMS OR CONDITIONS OF GRANT OR REQUIREMENTS OF 18 THIS SECTION.—The Administrator shall notify each eli- 19 gible entity receiving a grant under this section that fail- 20 ure to abide by the terms and conditions of the grant or 21 the requirements of this section may, in the discretion of 22 the Administrator and in addition to any other civil or 23 criminal consequences, result in the Administrator with- 24 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 12 •S 2149 IS holding payments or ordering the eligible entity to return 1 the grant funds. 2 ‘‘(i) ANNUAL PROGRESS REPORTING BY RECIPIENTS 3 OF GRANT.—Each eligible entity receiving a grant under 4 this section shall submit to the Administrator an annual 5 report on the progress of the program carried out using 6 the amounts received under the grant, including— 7 ‘‘(1) the number of new small business concerns 8 participating in the program during each of the 3 9 years preceding the report; 10 ‘‘(2) the number of new small business concerns 11 applying to participate in the program during each 12 of the 3 years preceding the report; 13 ‘‘(3) the retention rate of new small business 14 concerns in the program; 15 ‘‘(4) the average period of participation in the 16 program by new small business concerns; 17 ‘‘(5) the total, average, and median capital 18 raised by new small business concerns participating 19 in the program; 20 ‘‘(6) the total, average, and median number of 21 employees of new small business concerns partici- 22 pating in the program; 23 ‘‘(7) the number of new small business con- 24 cerns— 25 VerDate Sep 11 2014 04:02 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2149.IS S2149 kjohnson on DSK79L0C42 with BILLS 13 •S 2149 IS ‘‘(A) owned and controlled by socially and 1 ec [Text truncated for display. 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