May 23, 2012
CompTIA Small Business Spotlight: Education Needed to Help Small IT Firms Access New Sources for Capital
Washington, D.C., May 23, 2012 – In conjunction with National Small Business Week, CompTIA, the non-profit association for the information technology (IT) industry, is spotlighting its small business members and some of the issues affecting their ability grow their businesses. Today’s featured member is Waka Digital Media Corporation of Boston.
Waka Digital Media Corporation develops and implements solutions for organization-wide technology management and security assurance. The company’s security, compliance and IT outsourcing services allow organizations and their technology service providers to leverage enterprise-class oversight and consulting without the expense of in-house expertise.
“The cybersecurity landscape is changing more dynamically than ever,” said Jacob K. Braun, president and chief operating officer, Waka Digital Media Corporation. “Between internal and external threats, risks have grown so rapidly many organizations are unable to keep up on their own, so they rely on specialized providers for both information technology and information security outsourcing.”
For small businesses like Waka Digital, access to new capital and financing is critical to their ability to grow and keep pace with customer demand for their services.
In fact, a recent CompTIA survey of 400-plus IT businesses revealed that micro IT firms (less than $1 million in annual revenue) and small IT firms ($1 million to $20 million in annual revenue) place the most emphasis on the importance of developing new capital options, at 39 percent and 38 percent, respectively.
The survey also found that while 35 percent of all IT firms feel access to capital has eased over the last two years, only 24 percent of micro IT firms have seen an improvement and 29 percent indicate a decline in available capital.
The recently-enacted Jumpstart Our Business Startups (JOBS) Act opens up a new channel of vital equity capital for technology firms seeking funding to expand their operations. Making it easier for small businesses to grow means new jobs for the economy as a whole. The crowdfunding provision included in the JOBS Act will allow companies to raise up to $1 million during a 12-month period under streamlined Securities and Exchange Commission (SEC) reporting requirements.
But according to the CompTIA survey, just one in five firms is aware of this new potential source of financing.
One-third of firms surveyed by CompTIA expressed interest in crowdfunding as an option for raising capital, with the greatest interest coming from micro IT firms (35 percent) and small IT firms (33 percent).
“The key to driving continued growth and profitability across the technology sector is through innovative and disruptive products and solutions,” Braun commented. “Empowering fledgling and growing organizations with the flexibility of crowdfunding will enable a new wave of innovators, market challengers and thought leaders. Furthermore, these companies often develop focused products which IT and IS outsourcing organizations can leverage as part of the overall solution portfolio that they deliver to their customers.”
CompTIA Public Advocacy is working with its 2,000-plus member companies in the IT sector, particularly small and medium firms, to help them better understand and utilize the provisions of crowdfunding as an option that could address their capital needs.
The next step in this process is for the SEC to issue regulations to implement this new law. While final guidance for implementation is months away, the SEC is working to speed the process by soliciting early comments, which could guide the regulation drafting process. CompTIA is working to solicit comments from its members.
CompTIA is the voice of the world’s information technology (IT) industry. Its members are the companies at the forefront of innovation; and the professionals responsible for maximizing the benefits organizations receive from their investments in technology. For more information, visit www.comptia.org or follow CompTIA at www.facebook.com/CompTIA and twitter.com/comptia.
CompTIA’s Public Advocacy group focuses on a broad array of issues affecting the IT industry, with particular emphasis on representing the interests of small and mid-sized IT companies and entrepreneurs. Areas of focus include workforce education and training, tax matters, access to capital, health IT, procurement, cybersecurity and smart technologies.
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