Small businesses are engines of economic growth and job creation in the United States, employing half of the American workforce. Yet many struggle to grow, find talent, and access capital. COVID-19 and the resulting economic volatility has exacerbated many of these challenges. Goldman Sachs has had a long-term commitment to support small businesses as part of its aim to advance inclusive economic growth. Through 10,000 Small Businesses, Goldman Sachs helps small businesses create jobs and economic opportunity via education, support, and financing. To date, its signature 10,000 Small Businesses (10KSB) initiative has helped nearly 12,000 small business owners. These employers represent US$14 billion in aggregate revenues ‒ all told, they employ over 200,000 people, driving productivity, growth and employment in their local communities.
Goldman Sachs is a name that people tend to associate with Wall Street more than they do with Main Street. For one of the world’s leading investment banks, however, there has long been a recognition that the two are inextricably linked. Asahi Pompey, the Global Head of Corporate Engagement and the President of the Goldman Sachs Foundation, explains that economic and community development are key parts of the organization’s strategy. "Advancing financial opportunity and driving sustainable growth are core to our mission and programs. Just as we do with our clients, we focus our investments in communities on measurable results and long-term impact," she says.
Goldman Sachs’ Office of Corporate Engagement’s mission is to deploy catalytic
capital to spark economic growth for people and communities around the world; the
firm has deployed nearly US$3 billion in
10KSB is one of the firm’s longest-standing major community-focused initiatives, helping entrepreneurs in the US, UK, and France create jobs and economic opportunity by providing education, support services and access to capital. The US program launched in in 2009 with a $500 million commitment from Goldman Sachs and the Goldman Sachs Foundation to reach 10,000 business owners. 10KSB provides practical business education to participating business owners, bringing them together from across industries to learn, network and connect. The academic curriculum was co-designed by leading entrepreneurship educator Babson College, and covers the fundamentals for growing a business – from business financials to marketing and sales. The impact the program has achieved over the past decade is significant; of the nearly 12,000 businesses that have participated, 67% saw revenues increase within six months of completing the 12-week program, while 47% created new jobs over the same period.
In addition to education, Goldman Sachs also works with community development financial institutions (CDFIs) and other mission-driven lenders to provide growth capital to entrepreneurs, with over US$1.3 billion deployed to date. For Pompey, the combination of education and capital access is key to the program's success: "The 10KSB platform provides entrepreneurs with crucial business skills and access to a network of peers. Providing focused access to capital allows these entrepreneurs to help turbocharge their businesses and create jobs in their communities."
With the success of this initiative, Goldman Sachs committed an additional US$250 million in December 2020 to extend the program to another 10,000 business owners. The long-term endeavor has the added benefit of providing the firm with a decade’s worth of data and insights on the continuing inequalities facing business owners and the need for continued support. A 2020 10KSB report, Running a Business While Black, showed that the rejection rate for Black business owners applying for capital are three times higher than that of their white peers. Further, education doesn’t equalize: Black women in the 10KSB sample are the most educated, but have the lowest median revenues — that’s less than half of those of their white male peers. These and many other insights have been crucial in shaping Goldman Sachs continued community engagement, which includes 10,000 Women, a program supporting women entrepreneurs, the Fund for Racial Equity, being deployed to address racial and economic injustice, and One Million Black Women, which is committing US$10 billion in direct investment and US$100m in philanthropic support to address the dual disproportionate gender and racial biases faced by Black women.
Another key lesson from the program is that small businesses need workers with the
fundamental skills to fuel growth, but often find difficulty recruiting a strong
workforce. Half the program alumni report
President, Goldman Sachs Foundation challenges in staffing essential roles, which underscores the latest program innovation: 10,000 Small Businesses Fellows, the firm’s first philanthropic, programmatic investment in workforce development. The program places community college students in part-time, paid internships at 10KSB alumni businesses, fully funded by the Goldman Sachs Foundation, creating meaningful pathways to career readiness for underserved students who lack access to career-advancing work opportunities. Says Pompey: "Investing in the future workforce means taking action today. The launch of 10,000 Small Businesses Fellows—bringing community college students and entrepreneurs together in high-impact internships—is our investment in that future."
Addressing challenges like critical workforce shortages for small businesses and lack of high-impact opportunities for underserved students is the key focus of 10,000 Small Businesses Fellows. Successfully doing so requires clear understanding of the needs of small business owners and students, strong partners on the ground, and a systematic approach to learning, training and mentoring.
With over 40,000 employees working across 30 countries, Goldman Sachs today is a truly global organization. Its aim is to use this reach to act locally on a global scale, and its community outreach reflects that aim with active programs in over 100 countries. David M. Solomon, Chief Executive Officer, sums up the ethos of the firm's philanthropy and dedication to small businesses: "At Goldman Sachs, we believe that small businesses add to the vitality of our economy, and that's why we're committed to helping entrepreneurs grow their businesses in the communities where our people work and live."
Goldman Sachs is an active participant in the 'Force for Good' Initiative on the future of capital in support of the UN Secretary-General's Strategy and Roadmap for Financing the 2030 Agenda for Sustainable Development.
Source: Dealogic as of 9/21 based global M&A and ECM activity
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