The National Minority Supplier Development Council is a membership-based organization that connects certified minority business enterprises with corporate partners across the United States. Based in New York City, the NMSDC currently has a network of nearly 1,500 private and publicly owned businesses, healthcare providers and colleges and universities who purchase goods and services from member MBEs. The organization also offers educational programs and other resources to help MBEs build capacity and fuel further growth. One of these is the NMSDC Growth Initiative, a program that helps qualified MBEs gain access to equity capital while retaining their status as a minority owned business enterprise.
What is the NMSDC Growth Initiative?
The NMSDC Growth Initiative is a program that allows minority-owned businesses that are poised for significant growth to access equity capital while maintaining their MBE certification. Businesses that qualify are certified as “minority-controlled” and are permitted to bypass the requirement that the business be at least 51 percent owned and operated by a member of qualified minority. Approved businesses may accept equity capital from non-minority investors as long as the minority members retain 30 percent of the “economic equity” of the firm. Additionally, the minority owner(s) must::
- Control the day to day operations of the company
- Retain at least 50 percent “voting equity” (e.g. operational control)
- Represent the majority of the members of the firm’s board of directors
Further, the non-minority investors must be approved by the NMSDC certifying committee as “professional institutional investors.” According to the NMSDC, this means that the investor must be strictly in the business of making investments (versus managing companies). It must also have access to at least $25 million in capital.
The Certification Process
The certification process for a minority-controlled businesses is similar to that for certification as an MBE. The company must submit a request in writing to the president of the NMSDC. If the request for consideration is approved, the business then fills out an application, which will be reviewed by a national (rather than a regional) committee. It must also submit documentation proving that all necessary conditions have been met.
Any company that is currently certified by a Regional Minority Supplier Diversity Council may apply for minority-controlled status, regardless of size. Companies that have recently lost MBE certification because the minority group members no longer hold 51 percent of the equity in the company or no longer control the board of directors are also welcome to apply.
If you have additional questions about the NMSDC Growth initiative, check out this Q&A page, which goes over the program in greater detail. If you are ready to submit an application for consideration as a minority-controlled business, you can access one here.
The Carmoon Group, Ltd. is a minority-owned insurance brokerage headquartered in Hicksville, New York, with affiliates in various locations throughout the United States. We offer customized risk management and insurance solutions for businesses of all sizes across numerous industries, and we would be happy to meet with you to discuss your needs. Please give us a call today to set up an appointment for your insurance review. Or if you prefer, reach out online and we will get back to you at a convenient time.