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Papers by Julia Sass Rubin

Access to equity capital is a critical component of business entrepreneurship. Young companies la... more Access to equity capital is a critical component of business entrepreneurship. Young companies lack the cash flows necessary for debt repayment. They need patient capital, such as equity and near-equity, to develop and get their products ready for market. As Barkley and Henry confirm in this issue of the Review, the creation and growth of such companies is the path to economic prosperity for many rural regions. It also is a means to economic opportunity for rural residents. Rural economies, however, rarely attract traditional venture capital (see Lipper and Moncrief in this issue). This is due in part to the structural impediments they pose for the traditional venture capital model. Because the primary driver of traditional venture capital is profit maximization, the industry tends to gravitate to geographies that maximize potential investment opportunities and minimize operating costs. Areas such as Silicon Valley in California and Route 128 in Massachusetts embody such geographies...

ABSTRACT: Community development financial institutions (CDFIs) help to address the financial need... more ABSTRACT: Community development financial institutions (CDFIs) help to address the financial needs of under-served, predominantly low-income communities. CDFIs include community development banks, credit unions, business and microenterprise loan funds, and venture capital funds. Although CDFIs are a rapidly growing and an increasingly important area of community economic development, they have not received proportionate attention from academic researchers. This article begins to address the gap. It outlines the history of the CDFI industry and details how CDFIs are responding to three specific development needs: basic financial services; affordable credit for home purchase, rehabilitation, and maintenance; and loan and equity capital for business development. The article then considers the strengths and limitations of CDFIs, concentrating especially on the relationship between CDFIs and conventional financial institutions. It concludes by examining the impact that these alternative ...

The Risky Business of Education Policy

the state legislature . . . was quite within its rights" in instigating the investigation at... more the state legislature . . . was quite within its rights" in instigating the investigation at the University of Washington. The general if not universal pattern of un-American activities committees is, in personnel and procedure, one of seeking notoriety in line with the current mass hysteria of accusation, rather than dispassionate inquiry. Such committees are satisfied when they can, by whatever procedures they follow, expose those whom their criteria stigmatize as Communists; they appear to be dissatisfied when forced to a negative finding, as in the recent Illinois investigation of Roosevelt College and the University of Chicago. (They seem not to be interested in Communist activity, but only in personalities which make dramatic headline material. And they are interested in neither activity nor personalities of the fascist line.) The university administration and faculty faced by an investigation instigated by such a committee is certainly in theory free to choose whether to...

This article critiques the idea that the private sector can take the lead in addressing the capit... more This article critiques the idea that the private sector can take the lead in addressing the capital needs of underserved communities, focusing specifically on the emerging domestic markets approach advocated by Milken Institute researchers. This approach has three limitations. First, it treats all underserved communities as interchangeable, ignoring that they differ in important ways in the nature and causes of their capital constraints. Second, it claims that underserved communities lack access to capital primarily as a result of information failure, overlooking numerous other obstacles that discourage investment in such communities. Third, its overarching assumption that the private sector can take the lead in meeting the capital needs of underserved communities is unrealistic because it fails to address these additional barriers to investment. The article recommends a more individualized approach to understanding the capital needs of underserved communities and recognition of the...

Community Development Investment Review, 2005

Two leading scholars of community development analyze the New Markets Tax Credit (NMTC) program’s... more Two leading scholars of community development analyze the New Markets Tax Credit (NMTC) program’s origins in the economic boom of the 1990s and its implementation in a much different economic and political environment after 2000. The authors examine the program’s successes and failures and discuss prospects for improvement.

Community development financial institutions (CDFIs) are designed to improve economic conditions ... more Community development financial institutions (CDFIs) are designed to improve economic conditions for low-income individuals and communities by providing a range of financial products and services that often are not available from mainstream lenders and financiers. ; Part I of this paper reviews CDLF origins, structures, and current activities. Part II discusses the field’s historic sources of subsidized capital and why they have shrunk. Part III reviews potential new sources of capital and the organizational ways that CDLFs are responding to their changed environment. The paper concludes with recommendations for CDLFs, funders, and policy makers.

Terms of Use: Copyright for scholarly resources published in RUcore is retained by the copyright ... more Terms of Use: Copyright for scholarly resources published in RUcore is retained by the copyright holder. By virtue of its appearance in this open access medium, you are free to use this resource, with proper attribution, in educational and other non-commercial settings. Other uses, such as reproduction or republication, may require the permission of the copyright holder. Article begins on next page

Growing local companies is essential to the economic prosperity for many rural regions and reside... more Growing local companies is essential to the economic prosperity for many rural regions and residents. Rural economies, however, rarely attract traditional venture capital. Given the important role that patient capital plays in entrepreneurial development, the future economic vitality of rural communities rests, at least in part, on their ability to access such capital. Community development venture capital (CDVC) is a particularly adept model for overcoming the structural obstacles that rural geographies present for venture capital investors. Rubin explores some of the obstacles this model faces, along with options for sources of funding.

The community development venture capital (CDVC) industry consists of domestic and international ... more The community development venture capital (CDVC) industry consists of domestic and international organizations that use the investment tools of venture capital to create jobs, entrepreneurial capacity and wealth that benefit lowincome people and distressed communities. CDVC providers make equity and near-equity investments in small businesses with the intention of producing a “double bottom line” of financial and social returns, including livable wage jobs and healthy communities. This paper describes and analyzes the domestic CDVC industry, compares CDVC to other forms of venture capital, and provides an overview of recent CDVC industry trends.

... This order led to the creation of the Minor-ity Enterprise Small Business Investment Companie... more ... This order led to the creation of the Minor-ity Enterprise Small Business Investment Companies (MESBICs) program at the US Small Business Administration (SBA). ... Instead, they provide asset-based loans to small immigrant and minority-owned businesses, primarily in ...

Access to equity capital is a critical component of business entrepreneurship. Young companies la... more Access to equity capital is a critical component of business entrepreneurship. Young companies lack the cash flows necessary for debt repayment. They need patient capital, such as equity and near-equity, to develop and get their products ready for market. As Barkley and Henry confirm in this issue of the Review, the creation and growth of such companies is the path to economic prosperity for many rural regions. It also is a means to economic opportunity for rural residents. Rural economies, however, rarely attract traditional venture capital (see Lipper and Moncrief in this issue). This is due in part to the structural impediments they pose for the traditional venture capital model. Because the primary driver of traditional venture capital is profit maximization, the industry tends to gravitate to geographies that maximize potential investment opportunities and minimize operating costs. Areas such as Silicon Valley in California and Route 128 in Massachusetts embody such geographies...

ABSTRACT: Community development financial institutions (CDFIs) help to address the financial need... more ABSTRACT: Community development financial institutions (CDFIs) help to address the financial needs of under-served, predominantly low-income communities. CDFIs include community development banks, credit unions, business and microenterprise loan funds, and venture capital funds. Although CDFIs are a rapidly growing and an increasingly important area of community economic development, they have not received proportionate attention from academic researchers. This article begins to address the gap. It outlines the history of the CDFI industry and details how CDFIs are responding to three specific development needs: basic financial services; affordable credit for home purchase, rehabilitation, and maintenance; and loan and equity capital for business development. The article then considers the strengths and limitations of CDFIs, concentrating especially on the relationship between CDFIs and conventional financial institutions. It concludes by examining the impact that these alternative ...

The Risky Business of Education Policy

the state legislature . . . was quite within its rights" in instigating the investigation at... more the state legislature . . . was quite within its rights" in instigating the investigation at the University of Washington. The general if not universal pattern of un-American activities committees is, in personnel and procedure, one of seeking notoriety in line with the current mass hysteria of accusation, rather than dispassionate inquiry. Such committees are satisfied when they can, by whatever procedures they follow, expose those whom their criteria stigmatize as Communists; they appear to be dissatisfied when forced to a negative finding, as in the recent Illinois investigation of Roosevelt College and the University of Chicago. (They seem not to be interested in Communist activity, but only in personalities which make dramatic headline material. And they are interested in neither activity nor personalities of the fascist line.) The university administration and faculty faced by an investigation instigated by such a committee is certainly in theory free to choose whether to...

This article critiques the idea that the private sector can take the lead in addressing the capit... more This article critiques the idea that the private sector can take the lead in addressing the capital needs of underserved communities, focusing specifically on the emerging domestic markets approach advocated by Milken Institute researchers. This approach has three limitations. First, it treats all underserved communities as interchangeable, ignoring that they differ in important ways in the nature and causes of their capital constraints. Second, it claims that underserved communities lack access to capital primarily as a result of information failure, overlooking numerous other obstacles that discourage investment in such communities. Third, its overarching assumption that the private sector can take the lead in meeting the capital needs of underserved communities is unrealistic because it fails to address these additional barriers to investment. The article recommends a more individualized approach to understanding the capital needs of underserved communities and recognition of the...

Community Development Investment Review, 2005

Two leading scholars of community development analyze the New Markets Tax Credit (NMTC) program’s... more Two leading scholars of community development analyze the New Markets Tax Credit (NMTC) program’s origins in the economic boom of the 1990s and its implementation in a much different economic and political environment after 2000. The authors examine the program’s successes and failures and discuss prospects for improvement.

Community development financial institutions (CDFIs) are designed to improve economic conditions ... more Community development financial institutions (CDFIs) are designed to improve economic conditions for low-income individuals and communities by providing a range of financial products and services that often are not available from mainstream lenders and financiers. ; Part I of this paper reviews CDLF origins, structures, and current activities. Part II discusses the field’s historic sources of subsidized capital and why they have shrunk. Part III reviews potential new sources of capital and the organizational ways that CDLFs are responding to their changed environment. The paper concludes with recommendations for CDLFs, funders, and policy makers.

Terms of Use: Copyright for scholarly resources published in RUcore is retained by the copyright ... more Terms of Use: Copyright for scholarly resources published in RUcore is retained by the copyright holder. By virtue of its appearance in this open access medium, you are free to use this resource, with proper attribution, in educational and other non-commercial settings. Other uses, such as reproduction or republication, may require the permission of the copyright holder. Article begins on next page

Growing local companies is essential to the economic prosperity for many rural regions and reside... more Growing local companies is essential to the economic prosperity for many rural regions and residents. Rural economies, however, rarely attract traditional venture capital. Given the important role that patient capital plays in entrepreneurial development, the future economic vitality of rural communities rests, at least in part, on their ability to access such capital. Community development venture capital (CDVC) is a particularly adept model for overcoming the structural obstacles that rural geographies present for venture capital investors. Rubin explores some of the obstacles this model faces, along with options for sources of funding.

The community development venture capital (CDVC) industry consists of domestic and international ... more The community development venture capital (CDVC) industry consists of domestic and international organizations that use the investment tools of venture capital to create jobs, entrepreneurial capacity and wealth that benefit lowincome people and distressed communities. CDVC providers make equity and near-equity investments in small businesses with the intention of producing a “double bottom line” of financial and social returns, including livable wage jobs and healthy communities. This paper describes and analyzes the domestic CDVC industry, compares CDVC to other forms of venture capital, and provides an overview of recent CDVC industry trends.

... This order led to the creation of the Minor-ity Enterprise Small Business Investment Companie... more ... This order led to the creation of the Minor-ity Enterprise Small Business Investment Companies (MESBICs) program at the US Small Business Administration (SBA). ... Instead, they provide asset-based loans to small immigrant and minority-owned businesses, primarily in ...