The ReSET - Access to Capital: Baltimore’s Story


Newt Fowler

Johns Hopkins 21st Century Cities Initiative recently released an important study measuring access to capital for Baltimore’s startups and small companies of all stripes. While the study recognizes significant growth in financing over the five-year period analyzed (2011-15), it notes challenges facing companies seeking both investors (equity) and lenders (debt). During this period, equity investments tended to be on the smaller side, “making growing firms highly dependent on outside capital as they grow.” Bank consolidations actually reduced the amount of loans to small businesses, and SBA and government programs didn’t fill the gap. During this period, Baltimore’s capital resources didn’t keep pace with our needs.

The 21st Century Cities Initiative study raises the following concerns about Baltimore’s financing system for startups and small businesses:

  • “needs to modernize and meet the needs of small companies in the city”
  • “is both fragmented and underdeveloped to provide the full continuum of capital for small business growth”
  • is difficult to navigate

Based on the current state of Baltimore’s financing system, the researchers make four recommendations:

  • “Measure, track, and report” – the authors conclude you can’t fix what you don’t understand, not only as to what is effective, but what impact any new initiatives are having on addressing the needs of small businesses
  • “Connect, convene, and retain” – navigating Baltimore’s myriad of disconnected financing sources is a challenge for the most adept entrepreneur; but their research indicates that the challenge is the other way as well, with financing sources unable to find promising companies
  • “Build more lending capacity” – the study concludes that Baltimore’s lending capacity has shrunk; “we need to rebuild the art and practice of small business lending in Baltimore”
  • “Expand the range of financial institutions” – the authors recognize that the harder conversation is around “what’s missing from the local financing system” – equity and debt needs that efficiently address the funding spectrum in other cities are absent in Baltimore

The authors recognize the immense potential Baltimore has if it can effectively finance its small business and startup communities. There is no easy way to navigate these structural issues, but it’s critical we work to do so. Our financing gap leads to different results depending on whether you’re a tech company or a local retailer. Promising tech startups will find capital outside of Baltimore, often with the result that they grow elsewhere. Most small, bricks and mortar businesses are locked into what the local financing market provides, and as the Hopkins study shows, that fate constrains growth and opportunity. The work that Hopkins’ 21st Century Initiative undertook is commendable, now comes the hard part – converting insight to action for the future of Baltimore’s small companies of all stripes.

With more than 30 years’ experience in law and business, Newt Fowler, a partner in Womble Bond Dickinson’s business practice, advises many investors, entrepreneurs and technology companies, guiding them through all aspects of business planning, financing transactions, technology commercialization and M&A. He’s the pastboard chair of TEDCO and serves on the Board of the Economic Alliance of Greater Baltimore. Newt can be reached at

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