Assembly Standing Committee on Economic Development, Growth, and Household Impact

Good morning. Welcome to the Assembly Committee on Economic Development, Growth and Household Impact initial hearing, covering California's small business capital, innovation, and the role of small business <unintelligible>.

To ensure members of the media and the public have access to our proceedings today, this hearing will be streamed on the Assembly's website and members of the public can provide testimony in person here at the State Capitol, Room 127. To preserve the safety of everyone here and ensure the public's access to the discussion <inaudible> of our sergeants. Fine?

Yes.

Thank you to committee members, Vice Chair for joining us, and those staff members who are watching online for joining me today to discuss the vital role the SBDC plays supporting small businesses in our state and local communities. California's economy is powered by the people. With more than 4.2 million small businesses, growth isn't driven by large corporations alone.

It's fueled by local entrepreneurs, family-owned shops, and innovators in every corner of the state. Small businesses are the backbone of opportunity in California. They create jobs, open doors for first-time entrepreneurs, and help communities thrive, especially in underserved and rural areas.

Because of its scale of diversity, California doesn't just respond to global trends, it helps shape them. Our small businesses set standards, spark new ideas, and influence markets around the world. I'm excited for the conversation because when small businesses succeed, our economy grows stronger, more inclusive, and more resilient for everyone. Before we continue, I want to ask if our Vice Chair has any remarks to make.

I just want to welcome everyone here, and I'm looking <inaudible> here today. Thank you.

Thank you, Vice Chair Castillo. With that, I also, before we start the panels, I want to do two more things. I want to thank folks for putting these together. They're pretty awesome, and I know that the committee is going to enjoy them, but also, you know, as we share with all the Assembly districts throughout our Assembly districts in California and share the individual impact that each district has with their small businesses. So kudos to those that put this together.

As a former staff for a Chamber of Commerce and doing the work behind the scenes, these kind of things are important, and I know what it takes to do these things. Secondly, before we start, I also want to do a special shout out, because yesterday in the Assembly floor, AB 685, our small business resiliency and innovation, passed out of the Assembly last night, the bill.

So we were happy to present that, and it got out of the Assembly so it moves forward, to ensuring that, again, SBDC and their work is being acknowledged not only through words but through actions. So on that note, I want to first welcome our first panel to come and make testimony and introduce themselves.

First, we have, if you guys want to start walking over, we have Kristin Johnson, the regional director of Northern California SBDC, we have Pat Nye, regional director of Los Angeles SBDC, we have Ernesto Delgado, a founder of Tequila Museo Mayahuel, which I love their pozole, the green pozole, just for the record, and Joey Galloway, owner and entrepreneur of Mariposa Junction.

Yes. Yeah, that pozole is everything. It's really good. It's a little commercial, so if you haven't had it, please go have it for lunch today. And support our local businesses. We can start with Kristin.

Good morning, Chair Solache, Vice Chair Castillo, members of the committee, and staff. Thank you for convening this hearing and for your leadership in calling attention to the statewide impact of the California Small Business Development Center Network.

Today you will hear how the SBDC serves as a state frontline for small-business support, delivering trusted advice, capital access, and disaster recovery assistance in your districts. Our panels will demonstrate how strategic state investment in the SBDC translates into measurable economic growth, job creation, and a stronger local community across California.

A brief history: in 1980, President Carter signed legislation enacting the SBDC Network into law. In California, several universities and colleges worked to define the program in its earliest years. California Trade and Commerce was formed in 1992 and formally began operating the statewide SBDC program. In 2003, Trade and Commerce was shuttered.

SBA decided to restructure the California SBDC and sectioned it into what became five regional programs. While regionalization helped the program with stability, the SBDC regions lacked statewide cash match to draw down all federal dollars. It was a rough time, and there were years that California's share of the federal funds were not realized.

The other negative outcome was that the strong relationship SBDC had with the state was for a while almost lost. Ten years and a significant amount of rebuilding later, in 2014, the Capital Infusion Program, CIP, was introduced. CIP was and is specifically focused on growth of small businesses, securing capital to fuel expansion of jobs and the tax base.

In June 2017, California reallocated 20 million of Cal Competes funding to small-business support organizations under the Technical Assistance Expansion Program, TAEP, later renamed TAP. When established, TAP was exclusively for federal designated small-business programs.

In 2020, TAP was opened up to organizations without a federal designation, and in 2025 it was further opened to organizations that support nonprofits, not just small businesses. While this has been-- while this has expanded TAP's reach, this broader group of eligible organizations has led to a significant oversubscription of TAP funds.

A bit about the infrastructure and reach of the SBDC; with more than 70 physical locations and many services delivered online, California SBDC has more than 800 advisors that help California businesses grow. California's five SBDC regions are supported by 48 local hosts, many of which are UCs, CSUs, and community colleges.

Over 60% of our clients are people of color and over 50% are women-owned businesses. SBDC offers advising in 21 different languages. In the packets we've provided to the committee, there are performance metrics specific to each member's district.

A few quick results to highlight; in the past three years, SBDC clients started 10,000 new businesses in the state, new jobs, and retained jobs, jobs that would have been lost had it not been for SBDC assistance number 415,000. During the same time, SBDCs have provided capital access support at the level of $4.2 billion.

Finally, SBDCs have increased the California tax base by over 4.3 billion during this time. Perhaps most notable, however, is the cost-effectiveness of California SBDC. In 24-25 fiscal year, CIP funding for the SBDC was $3 million. With a specific investment-- with that specific investment, SBDC clients secured over 652 million in loans and equity investments.

For every $1 in state investment, SBDC returned $217 in growth capital. California is lucky to have many different organizations helping entrepreneurs, and at a glance, they may all look the same. Just three of the many attributes that make California Small Business Centers unique: first, accreditation.

SBDC is the only California small-business support organization that goes through a rigorous accreditation process every five years. Our program is certified for effectiveness. Second: verified results. Every single result we share is verified by the individual client. We don't use multipliers or estimates of impact. Our numbers are real. And most important, SBDC has a different client profile.

Sixty-five to 70% of SBDC clients are already in business when they come to us. We do provide lots of startup assistance, but the majority of our resources are for helping existing businesses grow, hire more employees, increase sales, and acquire capital to invest in the future. I skipped a slide. There we go.

I'd finally like to share with you the 2026 priorities for our program. First, our focus on capital. Small companies are constantly restrained by their ability to access capital. This is our number one priority. Second is the focus on technology and innovation companies. It is the fact that California is accelerating its technology leadership in 2026.

It is also a fact that SBDC is deep and meaningful with the resources it has for small tech firms. Annually, over half of California's capital metrics relate to the work we do with companies that are at the cutting edge of innovation.

In his recent State of the State Address, Governor Newsom referenced daring entrepreneurs who are dominating industries of the future. Very exciting. SBDC is engaged with the small businesses who will become these technology leaders. Next, California small manufacturers. The SBDC stands behind small manufacturers and is bringing new resources to our clients in the manufacturing sectors in 2026.

And finally, small business procurement with the State of California. Just yesterday, our leadership team met with DGS Director, Ana Lasso. We are committed to assisting small businesses secure contracts with the state and helping the state meet mandates of AB 2019. In closing, I again thank the committee and Assembly Member Solache for this opportunity. The Small Business Development Center Network is growing California economy every day.

Thank you, Ms. Johnson. Next we're going to have <inaudible>. We're actually going to have Pat Nye first.

Okay. Great. Good morning, Assembly Members, and thank you for having us. So I'm going to talk to you a little bit about California's leading small-business disaster resource, the SBDC Network. So as referenced on the slide there, there's all types of disasters that hurt our state. It's really just become a course of business.

And of all of those types of business-- or all those types of disaster and disruptions, we can all think of specific examples, like the 2018 Camp Fire that wiped out the town of Paradise, the 2021 Dixie Fire that did the same for the town of Greenville, the 2023 blizzard that hit Crestline in San Bernardino, the 2024 San Diego floods, the 2025 LA fires, and of course the COVID pandemic.

So, these are all impacts to our communities and their impacts to small business, and what all of these disasters and disruptions have in common is that they really are impacting those communities. And the other thing they have in common is that SBDC is there. We are on the ground. We are there right behind the public safety folks.

And once the scene is secure, we act almost as second responders in their helping businesses. And what we're helping them with are being able to navigate all the resources. In some cases, we're helping the areas get a disaster declaration or we're serving as the physical location for Cal OES, and FEMA, and all the other resources to come in and deploy from because we're already there and we cover the entire state. We're in all the districts.

And so, what we're actually doing with those businesses is we're helping them navigate financial resources, figuring out how to make their insurance claims for their business, how to find resources for their employees, how to restructure debt and start to come up with a rebuild plan, helping them with the various grant applications that seem to come up now pretty common during a disaster.

We're helping them maybe come up with temporary locations and even pivot their business to be more online temporarily. And we are there for the long-term. So it's not just coming in, assisting, and moving on.

We stay with those businesses through the life of their business and helping them really recover from those disasters and the rebuilding process that in many cases will go on for years. We're also a very strong conduit to small business. So the Office of the Small Business Advocate, they have the Outsmart Disaster Program.

We're one of the main conduits to be able to get that information around disaster preparedness out to small businesses. We're also the conduit the other way. You know, when small businesses are facing disruptions and impacts, we can make sure that state agencies and our legislature are aware of those issues and be able to engage their constituents in the small-business space.

Just to share a couple of examples, so during the COVID pandemic, there was a time when we were literally doing daily webinars, Q&A sessions live weeks on end, answering questions around all the resources--how do I file for a PPP loan or that sort of thing--making sure that everybody had the latest updates, and, you know, state agencies came and participated, our insurance commissioner came and presented.

So we really are that conduit, and so during COVID, we helped approximately 85,000 businesses for over 450,000 hours worth of one-on-one consulting. And that's not just a blast or, you know, one-size-fits-all-- that's sitting down and working with that business, walking through every aspect of where they were, and how we could get them to recovery.

Just last year in my region in Los Angeles, we faced the LA fires, and within the first two months of those fires happening, we had coached 2,800 businesses for 8,000 hours. And we still continue to work in those communities and we're starting to see some of that build back, as you'll hear from some of my colleagues here.

So I just want to make sure that the Assembly and all of our constituents are aware of the state's investment in this. We really are California's resource for disaster response for small business, and while it may feel a little dramatic, we live in an era when it's not if anymore, it's when. When is the next one?

And we are designed to help in all types of disaster or just things that are business disruptions. We are the go-to and we really are the state's investment in a highly visible way and encourage everyone to really utilize the SBDC as a disaster response. Thank you.

Thank you, Pat. Next, we have Joey Galloway.

Good morning, and thank you for the opportunity to speak today. My name is Joey Galloway, I'm a resident of Pasadena, California, and I was raised in Altadena until the age of 14. Altadena is home for me and my family.

While living there, my father who was a real estate investor, purchased a commercial block that we still own today. The property-- the property sits at the corner of Lake Avenue and Mariposa Street, often referred to as Downtown Altadena because it holds most majority of our commerce.

The block consists of two brick buildings built more than 100 years ago, one of them 12,000 square feet, housing seven retail businesses. The other property building is 8,000 square feet, housing six businesses. In addition to those storefronts, our private alley has been served as a-- served as a gathering place for our community.

We branded it Mariposa Junction. In partnership with the Altadena Chamber of Commerce, we've hosted annual Sip & Shop in December and our Summer Night Markets alongside the Altadena Neighborhood Farmers' Market. This event created opportunity for local, small home-based businesses and brought our community together. All that changed with the devastation of the Eaton Fire.

The fire completely destroyed the 12,000-square foot building. The remaining buildings suffered severe smoke damage and major roof damage caused by flying embers. Overnight, 13 businesses were displaced and a vital part of our community went dark.

Shortly after the fire, we were introduced to Justine Gonzalez from Wells Fargo Philanthropy & Community Impact Department who then connected us with Don Loewel from the Pasadena Small Business Development Center. Justine and Don met with my family and the affected business owners multiple times.

They took the time to understand our situation and worked with us to identify real, practical solutions to help us get the surviving building back up and running in a timely manner. Through the Pasadena SBDC, grants were distributed to each of the business owners and my family as well.

The funds helped the businesses stay afloat during a total loss of income. They also allowed us to complete interior cosmetic work and upgrades to all six spaces, work that was not covered by our insurance company. Because of this support, those six businesses would not be open today, and they were open just in 10 months.

I truly believe that without the outreach, guidance, and financial assistance from the SBDC, these businesses would not have been opened. Beyond the grants, the SBDC also hosted and funded a community ribbon cutting on November 22, 2025, the official welcoming back of the businesses. It was more than just a ceremony.

It marked a return of hope, stability for our neighborhood. My family and I have never experienced a disaster like this. Working with the SBDC shows us how critical these organizations are, not just to small businesses, but to the resilience and recovery of entire communities.

I want to personally thank Wells Fargo and Pasadena SBDC for their leadership and compassion. Their support helped restore a sense of normalcy and momentum to Altadena. Thank you for allowing me to share my story.

Mr. Galloway, I know we're going to get into questions in a minute, but I just want to commend you for being here and sharing your story. For those of us that were-- saw the-- post-- what happened to all the, you know, aftermath of the fires, it's very impactful to watch.

So just hearing your story has been very, very, very good to hear, and we're going to have some more questions, but I just couldn't let the moment happen or go by without saying something, so thank you. And to our favorite pozale-- I mean, sorry, to our favorite local restaurant, Tequila Mayahuel-- Museo Mayahuel. So, Mr. Ernesto Delgado.

Thank you. Thank you. Good morning, everyone. As a Sacramento State graduate, I'd like to say that I'm a designer first. The designer in me made me an entrepreneur, the entrepreneur made me a restaurateur, and the restaurateur made me a chef. The reason I say this is because I started a program that was called SBA Emerging Leaders Course.

It was a six-month course that really introduced me to many, many local professionals that I got assistance from, yet my-- probably the biggest impactful connection and resource was SBDC.

This SBA course taught me a very valuable lessons like, you know, not just writing a business plan, but just simple concepts that a business plan is ever-evolving, and just meeting those people that taught me the way and how to get those resources: Scott--I always can't pronounce his name--Gradolsky, Steve Roth, Oscar Garcia, and many, many more people that really got me the help that I needed when I needed.

I--as an entrepreneur, I started a small restaurant which was supposed to be small; ended up being much larger than I anticipated, and it turned into this restaurant next door called Mayahuel, Tequila Museo Mayahuel.

It was overwhelming because everyone loved my vision, my concept, and as a small-business owner, I was a bit overwhelmed because it was super busy, it was overwhelming, but SBDC taught me these valuable lessons and it showed me the path.

SBDC took me to-- my plan took me to the Culinary Institute of America, a two-year program. From there, it also led me to UCLA School of Business Management for Entrepreneurs, which was a two-month program, and then that program, through just constant quest for assistance and finding that path, took me to LBAN, Stanford's program on scaling.

All those came from SBDC, and anytime I had a question, such as-- or challenges--the pandemic, where no one knew what to do and I just did what I felt was in my heart and I reached out to the people I have in my phone because those are the people that connected with me through these programs through SBDC till today.

I reach out to Scott, Oscar, and anyone, you know, that that can help me. I had many challenges at Mayahuel as an entrepreneur, as a small-business owner, and I got the assistance I need when it came to, you know, any type of-- I had ownership challenges. I was able to purchase my-- invest some-- well, my main investor because of the connections.

SBD set up something similar to this where there was about 8 to 12 professionals that could help me with my situation, and they led me successfully through it. Today, I'm not just a small-business owner. I'm a very-- I love Sacramento.

I'm very much into my community, and I love to say that I assist my community. But more than that, I provide culture, and from one restaurant, through these programs, it's led me to have eight restaurants. I provide many jobs. Through the pandemic, I went from 55 employees at Mayahuel to three. I was one of those, and SBDC has helped me.

I've met multiple people that assisted me with accounting, with financing. It's led me to purchase two properties with SBDC-- I'm sorry, SBA loans that, as you know-- or if you don't, SBA process is very challenging for someone like myself, a small-business owner that doesn't have all the financial knowledge maybe that you need to have, but through these people, I was able to successfully get through these challenges. Thank you very much for allowing me to speak.

Thank you so much, Mr. Delgado, for sharing your story as well. With that, we're going to move on with the Assembly Members, if they have any questions to our panelists.

Thank you. I just want to thank you for sharing that, and I have friends who were from that area, too, that were affected. Thank you for sharing your story. I went out there myself, and it was very emotional just driving up there to the location where we were going to meet to then go see what happened.

You know, even thinking about it now, I start to get emotional. And thank you for your story. I'm going to have to go in there and try-- I mean, I love the food, but I have never tried the pozole, so that's on my list.

What about the tequila?

I don't drink, so I'll never try the tequila, but thank you so much.

Thank you, Vice Chair Castillo, and we will make sure you taste that pozole for sure. Assemblywoman Soria.

Yes. Actually, I have a couple of different questions, one related to kind of the issues around what we're seeing with immigration enforcement and the impact to the immigrant community. I was looking at the numbers in terms of percentage of businesses owned by immigrants.

And so I'm wondering, since Trump, the Trump Administration took over, what has been the pattern? Are we looking at data and how maybe some of these businesses that have previously accessed the types of services and funding that you guys provide, have you guys seen a drop? What is happening kind of around that realm?

Yeah. So certainly I can speak for the Los Angeles area. We've certainly seen business disruptions. There's also just generally kind of a cooling effect. You know, people are just a little bit on edge and sort of dealing with the variables of not knowing, you know, what's going to be disrupted or safe. Sorry.

So in terms of services to business, you know, we're still available to work with all eligible businesses, so the SBDC services, we're not any kind of enforcement program or anything like that. So we're still helping entrepreneurs in our region. We're also part of a pretty vast ecosystem. We have lots of partners in the region.

Some are very specifically focused on immigrant programs, things like that, and so, if there's ever a limitation with us, we have that great rolodex of partners that we can get people in front of.

And so what is it that you guys are doing to kind of demystify, maybe, the fact that you guys are not obviously immigration enforcement and that's not something that you guys look at when folks are going to access the capital or access the services?

For me, that's really, really important, given the fact that I represent a very rural community. There's not a lot of access to these types of services, to the types of dollars that may be available for these entrepreneurs, and so I'm just-- what are you guys proactively doing to ensure that, you know, that--

Yeah, so we do have to be very just focused on what we do, which is assist small business. So we do make sure that people know that that is available, and I think one of the core tenets of our program is, it is a confidential program.

So if we work with your business, no one else, including our funders, the federal government or the state government, get access to that data. We have that, but that never leaves us, and, you know, it's really up to you to decide if you want to be a success story or make that public. So we do certainly heighten that aspect of our work that, you know, we remain confidential and can work with anybody who's eligible.

Perfect.

With 800 plus advisors in our program statewide, we really have a broad reach into many, many communities. We have 70 plus locations, but those 800 individuals really represent through chambers, through ethnic chambers, through the communities, and help provide the link back to the SBDC.

Yeah, there's a reason our name is the Network, you know, the SBDC Network. We are a network of professionals and organizations.

And then, I want to follow up on kind of the issue I know that you raised in terms of how you guys have stepped in, and in crisis mode, you know, with what happened in Los Angeles and, you know, folks like Mr.-- yeah, Galloway.

I similarly represent an area that, in 2023, was significantly impacted by flooding and storms, and so wondering if there's data, what kind of work that you guys did for those businesses.

Also, one of the things that I kept hearing time and time again on the ground, there's a lot of small immigrant-owned businesses and they weren't eligible for any FEMA funding, and so I know that I, in particular, secured $20 million to help the entire community, and part of it was also for the entrepreneurs.

But I'm just wondering what kind of programs do you guys have in cases of emergency where folks do not qualify for FEMA dollars because of the immigration status or whatnot? And so, how do you support these entrepreneurs that have a record of being in these communities for years?

Yeah, so, you know, as my colleague noted, we do services in over 20 languages. We are embedded in these communities. We have a large network of professional advisors to connect with folks. Our work really is just being that one-on-one advocate, so we don't necessarily have our own funding to offer.

We're more the experts that can see all of the resources that are available-- federal, state, local, county--whatever it may be. We're agnostic. We just want to make sure that we're aware of all that and can get the client basically through all the hoops to be able to be eligible for that. So we're just there to advocate for the client. We don't represent any one specific program.

So are there existing programs that would help these types of businesses? For example, with impacts of wildfires, I imagine that many of those folks that were business-owners or immigrants and don't qualify for FEMA. Similarly in my area, flood.

What kinds of programs are out there, you know, other than relying on legislators like myself to do one-off investments, which is great that we were able to do that in a healthy budget year, but in a year like this year, what kinds of programs are out there, if any, to provide kind of a safety net for those businesses that may not qualify for the federal dollars, give-- especially now how the Trump Administration has come down very hard on, you know, the types of funding available? Not-- I mean, I'm not just talking about undocumented immigrants. I think immigrants, even that are lawfully here, are also kind of feeling the pinch.

So it's a bit of a moving safety net, to be frank. There aren't permanent programs really for any business, immigrant or otherwise, that are just there on the shelf waiting for the next disaster. We sort of have to come up and ramp up each time, so I think that that's also part of why things like the SBDC are so important.

At least we are there permanently in those communities and are at least, you know, the go-to for those businesses come in and then it's sort of on us to find whatever resources are available at that time to then get in front of those businesses. But it really does change each event, unfortunately.

Yeah, thank you for that, and I think it's a reminder that maybe not having, you know, one-off programs, but having a program that has the flexibility during times of disaster and we're seeing, so, Chair, I think that that's an issue that we should definitely continue to not just talk about, but figure out a path to create the opportunities to support small businesses that are impacted by disasters, regardless of what type of disaster it may be.

We would love to support that, and like I said, these are just part of business now. So it's always going to be something we're going to have to pay attention to.

And then my only last question--I'm sorry, Chairman--in terms of-- I understand that you guys are the Network. If you can just--and I walked in late, so you might have already addressed this--just want to understand in terms of the structure, there's GO-Biz. How are you guys interconnected? You know, I always hear about GO-Biz, and we fund all these great programs, so what's the connection?

So we are a federally-designated program. The Small Business Administration designates the SBDC. We receive funds from the federal government as well as from the state through GO-Biz. So we blend those funds to provide the services throughout the state. We're organized in 70 different locations, but then with outreach into hundreds more. There are five institutions of higher education that provide the fiscal processing for the different funds to get out to the communities.

Yeah. So we're employees of those finance-- or those higher education institutions. So even though we operate a federal program, we are state folks.

We're California's SBDC.

Thank you, Assemblywoman Soria, for a couple of questions you had today. Good news is that AB 685 passed yesterday and that will create a Small Business Resiliency Fund, so that's going to help with these kind of conversations.

On that note, I just want to thank the Assemblywoman because these are, you know, actual things that are happening in our districts today that we're all seeing, you know, in the media and are living it in our backyard. So, I think, thank you for those very appropriate timing questions.

I also want to acknowledge that our committee member, Assemblywoman Patel, has joined us as well, and, you know, she's our new incoming Education Chair, so I know she's a little busier nowadays, so thank you for your time today, Assemblywoman. With that, on my end, I just want to say thank you to all of you.

Very timely of a panel named the True Story of the California SBDC. I think the two stories that we heard from both panelists from, you know, the angle being business owners and being the communities, thank you for sharing your stories.

I think when Pat was acknowledging all the work that they've done as an organization during the pandemic, during the fires, I know firsthand, and I've shared this in different spaces that it's real. I ran a Chamber of Commerce before coming to Legislature, and my local chamber had experience working with the local SBDC.

One of my former business owners had--was actually ended up being the mayor of that local city--has been a champion of SBDC and is like the cheerleader, right, of how much of an impact it's had in his business, and he's able to translate that, you know, experience to other business owners.

I think that's the best way to do it when you have peers that are business owners discussing these things that are happening. And then obviously during the pandemic, as mentioned, you know, Pat mentioned it and really did a good job to highlight the work that they've done, and you've lived those experiences on being able to pick up the phone. Like you said, these are the numbers that I have in my phone, be able to call and make those direct contacts.

And so, thank you all for the information you shared today. I guess one of the questions that I have only just before I forget to ask my question--you know, I'm happy Ms. Soria let me time for one question--was, you know, as we legislators, you know, we like to legislate and do a lot of actionable items, how do the regulatory and compliance requirements impact the day-to-day operations of small businesses specifically?

Let's just say I can't control habits federally, but at least in the state angle, what kind of things are you seeing in the pipeline that I think we need to be aware of and that have an impact on the day-to-day operations?

May I say something on this?

Yes.

I have to say that SBDC and all its representatives that I've got to meet have made me feel welcomed in any type of challenge in daily operations. On whatever issue I had, they made me feel comfortable enough to make that call and point me in the right direction.

And that's why I say I have their numbers in my phone and they're always very welcoming to figure out and assist me in any operational issues, whether it was marketing, any assistance that I needed that they could literally-- I remember they would connect me with different individuals and I had a weekly call to-- for three months at a time to get through a certain issue.

They give me so many hours, that they would hire a professional. Sometimes they'd connect me with somebody in Santa Rosa that was a professional that they felt that it was the perfect connection to me and what I was going through at the moment and the assistance I needed.

Thank you. Anyone else? Sure.

You know, besides the funding, just to add to this gentleman just said, the human element was a big side of it as well too. Once we were introduced to Don Loewel, knowing that we had someone to--that we could call on, send an email to, went a long way for me and my tenants, especially my tenants because they-- total loss of business for them.

So knowing that there was an organization there, but besides that, a human element, went a long way, and I just want to-- I just want to speak to that. It kind of made the whole situation a little smoother, so to speak, for lack of better words.

Thank you both for sharing. I think Kristin and Pat have shared, you know, how of an impact they're making, you know, Northern California, Southern California, throughout our state, so. And all the people in the back, I also want to thank you all for being advocates and champions of these spaces. So thank you for this panel, we're very thankful of the opportunity to have a discussion, and we're going to move on to the next panel.

Thank you.

Thank you.

Thank you.

All right, we're going to the next panel. We have, we have Mark Klopp, the tech consultant, Northern California SBDC. And we have Danny Fitzgerald, Executive Director, San Diego Imperial SBDC Network, and Ravi Chala, founder of Chakra Technologies. Hopefully I said that right? Okay, with that, we'll start with Mark. Welcome.

Thank you so much for having us here. We're honored. And I'm hopefully going to be able to shed some light on early startup struggles and also navigating the valley of death. And we'll first define what that valley of death is. It's really where early innovation and sustainable revenue is not achieved yet.

And this is where ideas exist, prototypes are completed, but positive cash flow in the business has not been realized at this point. Most startups fail at this stage not because the idea is bad, but because resources runs out and market traction hasn't taken place yet. At this point, what common early struggles do founders face?

First of all, they experience funding gaps as it's too early for venture capital, but too late for personal savings or friends and family funding to help them out. Markets are unproven, customers are interested, but they're not buying at scale at this point either.

The founding team is under stress as they're wearing multiple hats and they're working very long hours. And then finally, the barriers exist. From credibility standpoint, they haven't established that credibility to be able to win grants or gain investments, run pilots or build partnerships without the track record of success.

And then they're under cash burn rate pressure and their runways for execution have been shortened. So why do the good startups still fail sometimes? First the product may work, but the business model isn't validated yet. There's technical market funding risk all hitting at the same time.

Founders underestimate how long and difficult it is to get fundraising and commercial commercialization traction. Isolation results because the founders try to solve everything on their own. So what's needed to get them out of this valley of death?

First of all, smart capital from non dilutive sources like grants or partnerships with customers that bring in non dilutive revenue to the company. And then venture capital equity is also a a great way to get some smart capital.

They need wise advice from advisors who understand grants and other financing mechanisms, along with support organizations that help translate technology into fundable plans. Persistence and adaptability are critical skills in order to get them through and overcome multiple funding turndowns and attempts, rejections, resubmissions of grants.

And while trying to refine their story from hey, this is a cool technology to we've got something that's needed, it's urgent, it's real and it's prioritized as far as your needs are concerned. Finally, partnerships and validations are necessary as university, government and industry partnerships reduce risk and external validation opens doors to both grantors and and investors.

So we thought an example of how this works in practice would be helpful. And this is the story of AT Dev and how SBDC helped them cross their valley of death.

AT Dev is a company that brings assistive technology products building robotic personal mobility devices like next generation wheelchairs, rehabilitation equipment and their goal is to have independent mobility for all. But for several years, they struggled to secure funding needed to scale the business, and they were stuck in this valley of death.

SBDC came alongside them to provide expertise in government grants and venture funding strategy. We helped them navigate complex federal programs and position themselves competitively. Assistance was also given in refining their financial modeling and projections. And then we supported them in development and lining up contract manufacturing partnerships.

As a result of this collaboration, in late 2025, AT DEV was successful in securing a $3 million seed financing and a $13.4 million government grant from the ARPA-H federal entity. So this has now positioned AT DEV to build momentum and recognition while securing a strong runway for executing the business.

So this is what escaping the valley of death looks like. With persistence, the right partners and expert guidance turning a mission driven startup into a funded scalable company that creates jobs and builds up their community. Thank you for your time today.

Thank you Mr. Klopp. Mr. Fitzgerald.

Good morning. Chair. Good morning Assembly Members. Before I start onto this, I I would be remiss, I was reminded by one of our advocates with your questions Assembly Member Soria about a funding mechanism for disaster.

Last year we did support along with the co authored Bill of the Chair Solache with Jessica Kolosa, the Assembly Member AB 265. That would have created a mechanism that you were describing. So I was reminded to make sure I said that.

So I wanted to check that off because we appreciated the Assembly Member also being able to be a co author of that. So I want to talk a little bit more about our technology innovation from kind of a big picture.

And then we have one of our small businesses that is gone that is going through these processes with the assistance with SBDC. A lot of times, SBDC is thought of just as helping Main Street businesses, helping restaurants, helping an array of those. But we help California's innovators. We do a huge amount of that type of work.

We have over 10% of the advisors that Kristen talked about are experts like Mark that are in innovation and technology, really being able to assist businesses for over 45,000 hours of counseling over the last three years. That's a lot of innovative counseling.

Helping people navigate, navigate getting to that minimally viable product, navigating their intellectual property, navigating what those challenges are from customer discovery, market research, understanding what that unique needs niche is and how they're necessarily going to bring their product to market. And then, of course, the pivot.

And the pivot and then the pivot again that they all are having to go through with each and each aspect of that to be able to get to that business. And then of course, the other component that Mark talked a lot about really is that journey through financing.

And so that really does start from that very early stage of when they have that great idea where then they're funding themselves through bootstraps, through using friends and family, then being able to find that first investor, that seed investor, to be able to create maybe that prototype and move forward with that, then be able to work with angel investors where they're starting to get some institutional investment.

And then, of course, moving to venture. And we've even had clients throughout the SBDC network that now have had initial public offerings over the last few years. We had one recently out of Carlsbad as well this past year. And so this has resulted in quite a bit of impact.

And so you can see that with those over 45,000 hours of counseling, it's resulted in over $2 billion of equity capital. That's just equity investment that's coming in and staying with these innovative companies, allowing them to grow. But something that's super important is equity capital has a big problem. It invests in white men predominantly.

About 1% goes to non white men historically. But for that $2 billion that SBDC has helped, over 27% of that funding has gone to women or people of color founders. And so we are trying to make sure we're reaching into the communities that have additional innovation.

In addition to working with universities like the Universities of California, the California State systems and places like that, finding other places where there are that research, being able to work them through with the grants and opportunities like Mark was talking about, taking advantage of the SBIR programs, which is even more important today as there's been so many changes at the Federal Administration, particularly with staff no longer being there, there's additional challenges that these researchers are finding to be able to get these types of grants.

And we help them navigate through those processes. And so last, we also do quite a bit of work around different types of funding opportunities, including pitch competitions. That is Dr. Orianna Brettinger. She has worked with the SBDC since 2017 and this was a new pitch competition she won last year.

As she's grown, she's out of Escondido, California and she has a fantastic technology being able to clean up wastewater, industrial wastewater, I mean, just the really nasty stuff that she's able to take care of with her particular technology. And having worked through that, we even have a pitch competition on Thursday in San Diego.

And I know there's some throughout the state that will also be happening. It's with this type of work that really we're helping California innovators impact the economy, being that next impactful, that next unicorn that's coming out of California, because that is what makes California great. Thank you.

Thank you for that. Next we're to have Mr. Chola.

Good morning everyone. I'm the founder of Chakra Tech. The word chakra in Sanskrit literally means circle or wheel. We are very passionate about circular economy. What we do is we convert waste, greenhouse gases, and in general any waste into biodegradable plastics. These degrade without leaving behind any waste or microplastic.

In addition to the startup, which I'm going to tell you more, I also serve as the global entrepreneur in residence at UC San Diego, which is a program funded by the Governor's Office for Immigrant Founders. So I help other startups in that role. So to give you a background about my training.

So I'm trained as a chemical engineer, grew up in a small town in India, was surrounded by plastic waste. So that really has been pivotal in how I view the world. And people don't actually underestimate plastic waste actually leads to clogging of the drains and floods, impacting more than 200 million people. So nothing unique to me.

And the fun part is that again, you don't have to think that it's a problem for India, other countries. In California alone, we generate more than 290 Olympic pools of plastic every single day, most of which ends up in landfill. So our technology also is working on a problem that's very local to us.

And while we have the landmark SB54 that that ban single use plastic, but there is no scalable technology to solve that problem. And we come in to bridge that gap. And one unique thing that happens though, I can be an innovator.

As I was coming to end of my research career at Scripps Research in San Diego, I had this breakthrough idea of converting greenhouse gases into biodegradable plastics. But idea is only half the battle. Nobody teaches you how to bring this technology to market. And this is where SBDC came in for us.

We were able to get plenty of help from marketing, how to do customer discovery. You name the help, we got it. So what I did was I signed up for an evening course called the Entrepreneurial Track.

I would go there, learn about the foundations of business, how do you structure the company right, how do you do the marketing, how do you approach the investors?

So all of that I learned in the evening courses and I'm not one, I'm one of the 60 people that was in the course and all of everybody had startups like this. The second part that I want to mention is the customer discovery. I think that was very, very pivotal to our approach to building this technology.

This is cool tech, but how does it solve someone's real problem? Technology can often be removed from what customer needs are. So that's what we learned from SBDC Run Course. The last part that also came up earlier, SBDC Advisors.

I'm a stubborn scientist, so I get a lot of pushback from the advisors on how to think critically, the strategy to adopt what, what landmines to avoid, and also how to strategically think about terms that I should accept from investors. So all of these are critical pieces that we have received from SBDC.

And again I have to remind that I keep on sending all my friends who are in technology startups to go there. So at least a dozen now and some of them are working in, in food space, making plants grow faster to good models for human cells so that we can come up with better drugs.

So these are some of my peers who are also in these programs. I think I want to end in one other note to give you the highlights of what we have been able to achieve with the help of SBDC.

So we have actually signed a contract with the Fortune 500 company that thanks to the guidance that we received from the SBDC, we have multiple letter of intents. And what I'm most proud of is we got a grant to hire interns part time employees. So we were able to recruit about 30 interns over the last two years.

And overall I've trained about 45 people in high tech jobs. And so we are able to pass on the help that we receive at every single day. So each, each week I'm bothering the SBDC advisor, but in return we believe in paying it forward.

And while we are still early in the stages of Valley of Death, as Mark and Danny pointed. But we are very thrilled to be receiving support from the sbdc and I think we are living programmed that these programs are working. And I would urge you to continue supporting the innovation ecosystem that SBDC creates. Thank you so much for your time.

Thank you. Dr. Chawla, I have to tell you, your passion and commitment to the industry you're in, I mean, I couldn't be sold on how you know the variables and plastics, and you mentioned I don't know how many Olympic pools full of plastics, too many. Right. Just the passion.

I want to acknowledge that because I mean, I saw the restaurant conversation earlier and I get passionate about food, but I wasn't sure about the plastic conversation. So thank you for that.

And I do want to do a side conversation with you because we're thinking of carrying a Bill for our AG community and how some of these degurable bags are having an impact on or can have an impact in their industry. So we'd love to chat with you beyond this hearing. Thank you.

On that note, thank you. Panelists, can you remember, do you have any questions? Dr. Patel.

Thank you to the three of you for your presentations today. I am a big fan of SBDC. I think that I haven't been shy about that. And we, of course, Dr. Chawla met I think like a year and a half ago when I toured your facility. You have come a long way since then and it's very impressive.

It's great to know that SBDC has been there to support you because that part of the story I definitely missed. Question to all of you, but specifically around SBDC, how typical are these stories? You've shared some remarkable success stories. How typical is that? And what can we do to help increase the reach?

So typical, I guess is a little difficult to define. I mean it's about 10 to 20% depending on the year are the types of clients that could potentially be in these innovative and high rapid scaling types of situations. And they cross all sorts of different types of naics codes and industries.

We've seen them everything from food, as Dr. Chawla was mentioning, to rapid technologies, life science technologies, changing in software and so forth.

And so we see huge amounts of ideas and so it becomes kind of that function where you have a huge funnel of ideas and then it's what of those ideas can come to fruition as a minimally viable product and we're able to kind of help craft some of those a lot more likely just because we're helping them ask those critical questions.

That Dr. Chawla was talking about and really being able to create that type of success. And so, I mean, we help hundreds and thousands of these businesses every year across the state of California.

And see these success cases, I mean, you see the impact of the billions of dollars of equity and represents hundreds and hundreds of those capital infusion events where they were able to experience it from something as small as a single seed investment that they're receiving from a Stage 0 or Stage 1 SBIR grant that they're able to receive all the way up to the large venture capitals.

And so typical is hard to define, but it's common. It is something that we do an extensive amount of work on throughout the state of California.

Thank you for clarifying that. It's good to know because oftentimes innovators don't understand the business landscape that they're encountering and nor are they contracts, attorneys and know what they're signing away. It can be difficult when you graduate from friends and family investors. You said seed money from angel to venture.

That definitely changes your autonomy in the development of your technology. And so it's nice to know that there's kind of this independent advocate, this navigator who's helping to make sure the business has their interests protected, frankly.

And then my last question, thinking a little bit more broadly, and I think Assemblymember Soria was touching on this a little bit too, what can we. What are the common roadblocks or barriers that we encounter?

And I think you were also talking about this at the more philosophical level, Chair, where do you see space for us as legislators to help make this process more smooth? Is there something we can do to help our innovation sector to be more effective, to be more efficient?

What are the most common barriers or blocks that you encounter as a small business person?

Okay, well, I think as an entrepreneur who's always short on money, I think I'll say that, but I think it's.

Something other than money.

I think I want to help put it in the context though. I think so, in technology too, there is that valley of death. So you can have an idea. An idea would be early stage of technology. But as we are building the prototype, we are getting deeper into the valley of death.

And the one that makes it successfully is obviously the success story. But a lot of people die in that valley of death. So thinking about where technology at least makes it to a minimum viable product, can we support it even further so that it doesn't.

The technology didn't die because it was not a good technology, because it didn't have enough runway, albeit it can be a shorter chunk of money. And in a time like where the federal funding is really short. Right.

So we alternate between, oh, we're going to change the world versus, oh, you know, our runway is less than a year. So I think those, those are critical and I'm not alone in this.

And the programs that Danny mentioned already, I think California is unique because those programs are now coming up, but I think we can do more of more of those. That's my personal take. And again, that benefits everybody together in the community.

So what I'm hearing is keep supporting SBDC.

R&D, R&D through SBDC.

And I'll second that on SBDC. I think I would characterize it as giving the companies a better chance of success, but not eliminating the attrition altogether because startups, a lot of them will die.

But if we can get a higher hit rate and we're going to build more jobs, create more opportunities and tax, tax income ultimately which they can then get recycled to continue this reinforcing loop of supporting innovation.

I get great comments from all my clients about, wow, this is a great use of taxpayer dollars and we're getting free advice, meaning no cash or no equity cost to the entrepreneur to be able to access this expertise. And so far, they say they're getting their money's worth, it's tax free.

So I think the other thing, just continue to listen to entrepreneurs and small business owners about what will make their business easier to hire, regulatory barriers, where appropriate, to listen to what are burdens for those businesses to unleash their potentials.

Thank you.

Thank you, Dr. Patel. Anything else, Members? Okay, I just want to add one thing.

I know we kind of joked about it earlier with your comment, but that's why I think the Bill you highlight last year that we really tried to push with Assemblywoman Colossa and a couple of us that were pushing for that and obviously this year's legislation, we really need to put our money where our mouth is at because we all talk about supporting small businesses, supporting our business community, but we need to do it by funding you guys, because I think the work that they're doing in our local communities throughout the state is critical so that these businesses startup or wherever they're at in the process are they feel the reinforcement and the support from someone other than government.

Right. So I think you all do an amazing job. So I think these are continuous stories of why it's evidence that we need to continue funding our SBDC. So trying to put it on record that it's critical and we need to not just say it, but actually act on it. So don't get me started.

So I'm going to say more. So, so with that, thank you for your time. Appreciate your time today. Thank you. So with that, as we continue and are very productive in this hearing today, we're going to continue with our third panel, which is why capital is the biggest need for small businesses.

And we have Mike Daniel, the Regional Director of Orange County Inland Empire SBDC Network. We have Melanie Shelby, founder and CEO of Primos Beverage Co. And Susie Pryor, Executive Director of Central California SBDC Network. We have all the regions, I love it from San Diego, Imperial Valley, the Central Valley, Northern California, LA. So, love, love presentation today.

So thank you all. I want to just highlight all the awesome work you're doing. So with that, we'll start with Mike.

Thank you very much, Chair, and thank you, Assembly Members. I think what you've heard through this whole presentation is access to capital. Access to capital helps our businesses start, helps them grow, helps them scale.

And so we want to walk you through what types of capital is available and how the SBDC really helps businesses obtain that capital that they need. So as we look at different things, the first thing that always comes to mind is 80% of business owners need capital at some point in their business life cycle.

It's also one of the hardest things to obtain for any business owner. And so want to throw a couple stats at you just to see, you know, if you know these things. But does anybody know the prime rate right now? Exactly. It's, I don't want to, I won't belabor this. 6.75% is the prime rate.

So a business, a small business loan is prime plus. Right? So as we look at different rates, I'm going to walk you through different types of lending programs. But I also want to just put this in the back of your mind.

If a business owner went and got a $100,000 loan at 10% over a 60 month period, they're paying back about $2150 a month. That's sizable and that's for $100,000 loan. So as we walk through this, we'll walk you through how we do different things.

But just wanted to put that in the back of your mind because often we don't talk about the true dollar amount of obtaining debt and what that means to a small business owner. But there are different loan types, right? There are conventional loans, there are SBA loans, there's CDFIs or community development Financial Institutions.

There's community backed lenders. There's also cities and counties that are now doing their own lending programs because they understand the need to really help businesses obtain capital and they don't want to lose them out of their city. And it is a very difficult thing to do.

And so as we look at some of these different things, the state and Assembly, before you leave, you did talk about some of the different programs that are available.

The state actually has two of their own lending programs through I Bank and through the state treasurer's office called the California Pollution Control Program that are loan programs that are run by the state of California to help small business owners. And so a typical small business loan is usually about 60% of business owners need less than $100,000.

That is the hardest capital to obtain. And that's exactly where the state programs fit. So if there, there's opportunity to better understand that. And we'll make sure that we highlight some of those things in your packet. But amazing programs that are helping a lot of small businesses. People just don't know how to access them.

So we'll make sure that we cover some of that with you. And so as we talk about how the SBDC helps, we've created something called the California SBDC Finance Centers.

And I want to make sure that we give a special highlight to Cal OSBA who their funding through the CIP program has allowed us to create these types of programs. Focus just on debt capital for small businesses.

And as we're part of a bigger program at calosphere that really helps businesses start, helps them grow, helps them scale debt funding. Number one reason why all what all businesses need and the biggest issue that they all face, right? Paying, you know, their rent, paying bills, you know, how do I grow? I'll give you a quick story.

We were helping a business in Santa Ana. They were a restaurant. The Health Department came in and they were going to shut them down if they didn't make a few changes. Well, they needed capital that day because the Health Department was coming back the next day to verify that they had done it.

Instead of being able to go access capital or a line of credit from their bank, they didn't have that ability. So they went online and got a merchant advance loan that ended up being 50% interest a year. 50%. But that was the only option.

We then helped turn that around and we refinanced that through the California Pollution Control Program. They're now paying 6%. Right. So there are great programs that the state runs. I think we just need to make sure that more people know about them. Yeah, I mean, there and, and there's ability to make changes. Right.

And I think that's where you guys have that ability to see what's working and what might not be working. But a little bit about how the SBDC Finance centers work across our state, we have hundreds of consultants on all of our teams that are former lenders, bankers, underwriters, that this is their skill set.

And so we hire them and what they do is business owner comes in, we help package that loan, and then we help matchmake with an appropriate lender. Businesses do not know where to go to get a loan. Right.

And they typically will go to their relationship bank and those are usually larger banks and they don't usually play in this world. Right. They're not funding things that are less than 100,000, less than $300,000. So they either go online or they don't know where to go, or they give up, they go out of business.

And so this is where we specifically help. And there are hundreds of credible lenders that offer credible rates and that's what we help them do. So we package loans and we help matchmake it.

And just to reiterate what Kristen had said on the first panel, the capital infusion program for $3 million that the state funds us for every dollar you give us, we help put $217 of debtor equity into a small business owner's hand needed to start to grow just to survive sometimes.

And so I'll stop there and thank you for your time.

Thank you, Mr. Daniel. Next we'll go to Michelle B. Hello.

First of all, I want to say thank you to the chair, thank you to the Committee, thank you to the SBDC for the opportunity of joining you today. I'm going to actually give you a tale of two different businesses owned by the same person. I'll take off my glasses. I can't see.

I'm going to keep taking them off and on. I am the founder and CEO of Primo Beverage Company, which is a company that we launched in January of 2024. We are a luxury sipping tequila with no additives. And we are fortunate to be in five of the footprints for Mr. Delgado.

So we love being a partner of his. And since that two year time frame, we have been able to sell over 4,000 bottles. We've got 90 different points of distribution and we're in about 23 total wines in Southern California.

I say that because previously my first relationship with SBDC came from being a public affairs professional for 10 years I was a corporate energy lobbyist in Washington D.C. and then decided to venture out on my own, which is what we tend to do as small business owners. And decided to launch a public affairs firm.

And for 15 years we had a footprint in the Bay Area. During that timeframe as a service oriented entity, we were able to take advantage of SBDC loan funding from a capital standpoint to move us into brick and mortar. The pandemic hit and we were representing forward facing entities, stadiums, arenas, food and beverage operators and airports. Airports.

And we saw a devastation of our business. We lost about 90% of our business within the first 60 days of the pandemic. And so we were able to take advantage of a Covid IDL EIDL loan. We were having challenges and it was through the sbdc. And you know I'm an informed person, right? It's through the.

We were informed practitioners. It's through the SBDC that really allowed us to navigate that fast forward. We still weren't able to be successful in that venture and we had to close those doors. A year later I decided that my love for tequila over 15 years shifted. Should turn into a business.

And what was so very interesting was when you talk about the Valley of Death it doesn't just exist in tech, it exists in small business as well. And so I had the opportunity to be self funded for the first two years as I moved through Jalisco with a level two tequila sommelier.

Even sold my then home to bring this venture to fruition. Raised money from family and friends but found that when you are moving into a new venture and you don't have experience, you have to go to a place where you learn. And Assembly ,member you talked about what sort of things can be done independent of resources.

I wish there was a distillery that I could have partnered with to really understand distribution and production here in the United States that maybe could have taken advantage of some tax credits to be able to bring on a solo entrepreneur at that point in time. So I just wanted to throw that bug out to you.

Started looking, you know, you raised money from family and friends and it was now time to figure out how do you raise money for a lead investor coming in at a six figure investment. It was through the SBDC.

There was a gentleman by the name of Brandon Beverly who was my consultant here in Sacramento because I moved back to Sacramento. And he walked me through finances. What I thought was important in terms of having an attractive financial package to leverage equity investment from angel investments. I learned from Mr. Beverly that it was not.

And so working with him over about six months, we were able to pull together something that was competitive, that lead investors could come in and help become a part of our equity investment. We also were able to take advantage of non dilutive investment. Through the non dilutive investment, we were able to leverage that.

And the interest rate on that is much lower than what was stated here. And so I just want to say there are opportunities that are available and we feel very fortunate to understand that the SBDC is there for us. But and also want to just say thank you.

Understand that out of the Assembly floor yesterday, you had 73 votes, I believe, in terms of passing. And the only people who didn't say aye were the people who weren't in attendance. But we need so much more because navigating in this environment can be challenging. But what an opportunity to navigate with partners like the SBDC.

So thank you so very much for your time.

Thank you, Michelle, for sharing that. And we'll go to Ms. Pryor.

Okay. Thank you, Chairman Solachi and Members. It's delight to be here today. I want to start my remarks also talking about a small business story. You have seen some extraordinary folks here today. I think you understand why we love our work because they are just remarkable small business individuals in this state.

Last week I literally sat down at a kitchen table with a small business owner. She owns a restaurant. She was concerned about her Eidl loan. Those loans had developed about 30 years or 30 months, sorry, of interest before they went into repayment. So there were a lot of restaurant owners who were concerned.

I promised her I would talk about that today. But what interested me about that conversation more than that immediate problem was that as we were talking, she said, zero, I've got to leave the room a moment. Excuse me, it's payroll today and I just need to go look at my bank account.

And she came back and she's beaming and she says, after payroll clears, I've got 19 cents left. And she thought that was a big win. Right. So when we talk about doesn't it just, it reminds us the resilience what folks go through to sustain these small businesses that contribute to their communities.

And so I was humbled by that. I worry for her. I hope she doesn't have an auto pay out there somewhere. But genuinely, the folks that do this work do it with heart and purpose. We have spoken a lot about the Valley of Death today.

I agree with the comments earlier that there are people who die in that valley. But beyond the Valley is what we really call crossing the chasm. And these are the folks who need to scale and they may have made it through the valley, but that first initial contract, they can't replicate it right.

So this is another place where we come in, we help people do the scaling activities that we're interested in. And that's arduous work. It takes grit, it takes innovation, it takes persistence. I've been through that journey. Mike has been through that journey and so have so many California small businesses.

So when I think about what I want from you, you guys, it is helping us think about scaling existing businesses and how we can go about that and how I really think simply helping position what it means to be a small business in California among your colleagues is a cost free addition to the kinds of work we're doing.

So work is arduous. It does not have to be lonely or uninformed. It needs partnerships with programs like ours and organizations like the state to help us build success for clients.

I also want to talk a little bit about the fact that you've heard through today's testimony that the demand for SBDC services continues to grow year over year. It is essential. This is money. But it is essential that funding levels remain aligned with just the scale and scope of that growth, but also the complexity of these organizations.

If we are going to have these additional unicorns, it is going to take some commitment of funding beyond federal funding. Right? So we've talked a little bit about the Federal Government. We do want to talk a little bit about reducing our dependence on those sources of funding. We strongly support.

I also want to comment just a moment on AB685 and thank you, thank you for that legislation. We support that strongly. I'm in the Central Valley, but I see that legislation as a template.

We also have droughts and storms and fires and things that concern me because it's very hard for a small business to find those resources avoiding the payday loan solutions to restore their businesses.

So we're hopeful for a legislative champion to carry out subsequent budget requests that ensure that the state's primary small business delivery system has the capacity, stability and regional reach to respond effectively.

So I hope today's meeting has really been informative and that you view I think the California SBDC as a whole as uniquely positioned to serve you, the Legislature as your one stop shop for small business expertise combining on the ground advising, real time data and deep regional and district insights across all 58 counties.

When you need trusted implementation by folks who are used to doing this work, rapid feedback from the field or subject matter experts in that variety of languages across this state. You're going to find that we have that expertise in a wide range of areas. Capital access, we've talked about innovation, disaster recovery, and workforce adjacent challenges.

So the SBDC network is already there and we are prepared to deliver. And I thank you for your time.

Thank you. Ms. Pryor. Any questions? No, I don't think I have any further questions. Besides again, thank you the panelists for being here today and thank you for representing Central Valley again and again. I'm happy you started with that. You know the true the two sides of the coin.

And thank you for the prop of bringing your product. Right. You're as strong as your product. So thank you for bringing your tequila. So I'm now and enjoy us at my well. Yeah. And now and now we know goes with posole over there. So that's good. So with that thank you to the panelists.

Wonderful.

Okay everyone, as we've heard throughout today's discussion, Small business development centers. Yeah. And we're going to thank the SBDC. But before we do that, we want to make sure we do a public comment. So is there any public comment at this point? We'll entertain in public comment.

Good morning Chair Assemblymember David Nelson, Capitol Regions Consulting a small business and proud to support the SBDC. Just wanted to say thank you for your leadership hosting this informational hearing and. Also really want to point out that. A lot of the work that we do in the that the SBDC does throughout the state couldn't be done without.

A great partnership and support of California. Office of Small Business Advocate. We're really excited about the new Director that is there. OSBA is under Go Biz and they're a strong partner for us and have been integral in the expansion of the program. So I just wanted to share that as well.

You've heard a lot of great information today and we're all available for any information that you need about your districts. Thank you.

Thank you so much. Anyone else? Okay, we're going to close public comment. And with that again we want to thank the SBDC development today for playing a critical role in turning the potential into measurable outcomes.

Throughout Trusted through trusted and one on one advising and data driven support, FTC has helped business start, stabilize and grow resulting in new jobs, increased revenues and stronger communities. Strategic investment SBDC and small business support programs is not just an investment in entrepreneurs. It's an investment in economic growth, competitiveness and opportunity across the state of notion.

By working together, we can ensure small businesses not only strive but but thrive and continue to fuel our economy for years to come. Thank you to all the panelists for your time, testimony and commitment in building a stronger California for everyone. This hearing is now adjourned.