It’s never easy being a small business. It’s hard enough to qualify for venture capital funding . . . and yet receiving it could disqualify you from other small business incentives through the Small Business Administration and other government programs. It’s a “damned-if-you-do-damned-if-you-don’t” conundrum.
According to a recent report in the New York Times, Jason Altmire, a member of the U.S. House of Representatives (D-PA) proposed the Small Business Expansion Act of 2007 to enable small businesses to qualify for federal research grants without being penalized for accepting venture capital money. VC funds are crucial for companies in the biotechnology arena, for example, that typically take years to generate revenues, which means they often have difficulty getting bank loans. Venture capital can mean the difference between survival and failure.
The White House and the Small Business Administration are critical of the bill. They cite the concern that the legislation will give VC firms “them the potential to masquerade as small firms and tap into billions of dollars in federal research grants and contracts” — which are supposed to be set aside for “true” small businesses.
The legislation passed the House of Representatives at the end of September. It has been sent to the Senate, where it was referred to the Committee on Small Business and Entrepreneurship — which (go figure) has both a Democrat site and a Republican site (don’t get me started on why the American taxpayer needs to pay for two sites to the same committee).
This entry was posted on Saturday, October 20th, 2007 at 11:43 am and is filed under Legislation, Financing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.Leave a Reply
