Despite having the deepest and most diverse capital markets in the world, the United States still struggles to provide sufficient capital to many small businesses outside of major commercial centers as well as to women-owned and minority-owned businesses regardless of size or location. This paper reviews the academic literature and provides an analysis of some recent data to gain understanding of the causes of these gaps as well as the solutions for filling the gaps.
Not included in this paper is the following thesis: In the same way that community banks are more effective than large national banks at lending to local businesses, crowdfunding could be an important tool to bring and keep investment capital local.
KingsCrowd's recent analysis of the equity crowdfunding markets across the US also shows similar small business investment patterns (e.g. a lot of the top states are similar to the VC and SBIC top states).