House Small Business Subcommittee hears mixed evidence on private equity’s role in Main Street growth

Chairwoman Van Dyne convened the House Small Business Subcommittee hearing titled “Investing in America and how private equity empowers Main Street,” opening a wide-ranging discussion on the role private equity, venture capital and related federal programs play in financing and scaling small businesses.

The hearing featured three witnesses who described distinct experiences with private investment. Jordan Bastable, cofounder and managing director of Longwater Opportunities, said private investors often bring operational support alongside capital and rejected the idea that private equity only profits from business failures: "The idea that private equity succeeds when businesses fail is simply false," he told the panel. Sarah Fields, chief executive officer of Jetta Corporation, a U.S.-based bathtub manufacturer in Edmond, Oklahoma, described a partnership with a lower-middle-market private equity firm that she credited with raising production capacity, improving efficiency and enabling an acquisition and onshoring plans. "Within the first year of their support, we saw a 10% increase in production capacity and an 8% efficiency gain," Fields said. Sennifer Mendoza, cofounder and general partner of Mendoza Ventures, urged better access to capital for underrepresented founders and defended smaller funds that sustain local entrepreneurial ecosystems, saying her firm has "deployed over $30,000,000 into the American economy" and sustained portfolio companies that created jobs and revenue.

Why it matters: Members framed the hearing as a real-world test of private capital’s promise and risks for Main Street. Proponents emphasized that equity investors can deliver nonfinancial support—management expertise, supply-chain improvements and workforce investments—that banks typically do not provide. Witnesses and members also raised concerns that capital concentration on the coasts and the growth of mega-funds can reduce opportunities for smaller funds and entrepreneurs outside major hubs, and that women- and minority-owned firms receive a disproportionately small share of venture capital.

Key points from testimony and member questions

- Operational support and workforce effects: Bastable described investments that implemented retirement plans, health benefits and training at portfolio companies. Fields said private equity helped her company identify $350,000 in annual materials savings, expand market share and plan an acquisition that she expects will enable 30% workforce growth over 18 months. Members and witnesses repeatedly pointed to workforce recruitment and retention as a bottleneck for onshoring efforts.

- Access and equity in finance: Multiple members and Mendoza cited research and testimony showing stark disparities in venture funding for women and minority founders. Mendoza told the committee that homogeneous decision‑making in many funds limits who gets funded and urged lower barriers to programs that support diverse fund formation.

- Federal programs and policy proposals: Members discussed the Small Business Administration’s Small Business Investment Company (SBIC) program and proposed adjustments to encourage investment in rural and underserved markets. Chairmen and witnesses referenced the investing-in-all-of-America proposals and one bill cited by the subcommittee: HR 3174, the Made in America Manufacturing Finance Act of 2025, introduced to raise the SBA manufacturing loan cap from $5,000,000 to $10,000,000. Witnesses urged iterative improvements to existing programs (for example, standardizing documents to reduce legal costs for small funds seeking SBIC licensing) rather than wholesale cuts.

- Risks and accountability: Several members raised well-publicized criticisms of some private equity strategies—heavy leverage, asset sales, and workforce reductions—particularly in health care and housing sectors. Witnesses acknowledged differences across firms and said accountability should depend on the degree of control and governance rights held by an investor.

What the record shows (specific testimony and figures)

- SBIC program: Ranking Member MacIver noted the SBA partners with more than 300 SBICs; the transcript references "more than 194,000 investments" and "deploying more than $130,000,000,000 of capital to small businesses" through the program as of 2024 (figures cited in committee remarks).

- Mendoza Ventures: Mendoza testified her fund has "deployed over $30,000,000," sustained 15 portfolio companies, and that her portfolio generated about $140,000,000 in revenue in 2024 and supported roughly 550 full‑time jobs, according to her remarks.

- Jetta Corporation: Fields testified Jetta employs about 60 people, generates about $20,000,000 in annual revenue, has partnered with private equity for roughly 2½ years, and expects workforce growth of about 30% over 18 months tied to an acquisition and onshoring plans.

- Private markets scale: Witnesses and members cited broader private markets data (for example, venture capital activity surpassing $209,400,000,000 in 2022 as noted in remarks) when discussing concentration and market dynamics.

Discussion, committee context and next steps

Members from both parties pressed witnesses on how to expand investment into underserved regions and improve program outreach and simplicity. Witnesses recommended lowering administrative barriers, standardizing legal documents for small funds seeking SBIC status, and pairing capital with technical assistance (workforce development and MEPs) so small firms can both access funds and scale effectively. The committee did not take formal votes or adopt legislation at the hearing; members were granted five legislative days to submit additional materials for the record.

Ending note: The hearing highlighted a mix of concrete, operational examples of private capital helping small manufacturers and persistent concerns about access, concentration and accountability. Members and witnesses largely agreed on the importance of federal programs like the SBIC and CDFI channels but diverged on how aggressively to alter those programs. The committee left the record open for further written submissions and follow-up.