As we remember the fallen members of the military who have fought America on Memorial Day, it also is a reminder to honor the veterans who are still with us and have transitioned to civilian life. Roughly 10% of all businesses in this country are veteran-owned firm, according to the SBA. These firms employ about 5.8 million Americans, according to the U.S. Small Business Administration (SBA). In fact, some of the country’s best known companies were founded by veterans, including FedEx, GoDaddy, RE/MAX, and Walmart.
The SBA reports that among the top industries for veteran-owned firms are finance and insurance; transportation and warehousing; mining, oil and gas; construction; professional services; and manufacturing.
Like all small businesses, companies owned by veterans were negatively impacted greatly by the COVID-19 pandemic. Millions of businesses were forced to close during the lockdown, and many of them never opened again. Those that were able to reopen have had their operations restricted by COVID-related social distancing regulations and the additional costs of operation, including personal protection equipment (PPE).
The federal government offered the recently concluded Paycheck Protection Program (PPP), which provided a lifeline for small business owners, as did the Restaurant Revitalization Fund, and the SBA’s Economic Injury Disaster Loans that offers loans with low interest rates and long payback periods (30 years).
Sources of funding for veteran-owned firms
Angel investment firm Hivers & Strivers has invested exclusively in companies led by military veterans. Many of the entrepreneurs are graduates of the service academies (West Point, Navy, Air Force and the Coast Guard Academy).
Veterans Venture Capital exists “because veterans make great entrepreneurs, and we believe that in the long run, the ROI is simply superior.”
TFX Capital is a veteran-led venture capital firm uniquely focused on investing in high performing, accomplished, and commercially-tested former military leaders building early stage technology (B2B) and technology-enabled businesses.
The Veterans Business Fund (VBF) is a not-for profit organization established to provide capital to veterans who are well qualified through their military experience to become successful small business owners but lack sufficient equity capital to qualify for a small business loan. The VBF provides capital to veterans in the form of a non interest bearing loan with very favorable repayment terms.
The U.S. Department of Veteran Affairs, the Veteran Entrepreneur Portal (VEP) is designed to help veterans with the resources necessary for every step of entrepreneurship, including accessing capital.
Warrior Rising empowers veterans and their immediate family members by providing them grant opportunities, mentoring, and other types of business support.
The SBA and organizations, such as The National Veteran Small Business Coalition (NVSBC), promote the growth, strength, and success of Veteran owned small businesses in the federal marketplace by helping companies owned by veterans to get consideration for federal contracts. The SBA’s Service-Disabled Veteran-Owned Small Business program aims to award at least 3% of all federal contracting dollars to service-disabled veteran-owned small businesses annually.
The National Veteran-Owned Business Association (NaVOBA) is an independent nonprofit organization governed and led by Corporate America. Its mission is to create corporate contracting opportunities for veteran-owned companies through certification, advocacy, outreach, recognition and education. Additionally, the Veterans Business Outreach Center (VBOC) is a one-stop-shop for transitioning service members, veterans and military spouses looking to start, purchase, or grow a business.
SCORE has partnered with Facebook to help veterans, military members and their families start and grow their own small businesses. SCORE provides free resources and connects aspiring veteran entrepreneurs with mentors in their area. Some of SCORE’s mentors are military veterans themselves. They understand the challenges of veteran entrepreneurs because they’ve faced them, too. They can help veterans translate their military skills into business success.
SCORE provides online resources, including webinars that provide actionable step-by-step guidance on starting a business and filing proper documents to secure funding and an online seminar providing vet-to-vet advice on business ownership.
Veterans comprise just 8% of the U.S. population, but they are twice as likely to own a business as their civilian counterparts. Veteran-owned businesses earn $1.1 trillion in annual sales. This should not be surprising, because business ownership, in many ways, is a battle. Entrepreneurs encounter challenges on a daily basis. Military veterans can rely on their experience and resiliency to become successful business owners. Veterans are often great leaders, having honed determination and the ability to get the job done while serving in the U.S. military. These skills can serve them well when they transition to civilian life.