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Monday, April 14, 2008

Billion Dollar Venture Capital Firms to Receive Government Small Business Contracts Under New Bill

April 14, 2008

Petaluma, Calif. – The following is a statement from the American Small Business League:

A new bill set to come out of the House Committee on Small Business will allow the largest venture capital firms in the nation to participate in federal programs designed to assist small businesses.

On its surface, the bill appears to be designed to expand the federal government’s Small Business Innovation Research program (SBIR). However, opponents believe the actual purpose of the bill is to create a new loophole that will allow multi-billion dollar venture capital firms to receive billions of dollars in federal small business contracts every year.

Critics of the new bill say it will essentially repeal the Small Business Act and could have devastating consequences for thousands of small businesses across the country. The key provision of the bill will amend the Small Business Act by changing the definition of a small business as “independently owned and operated” to include firms owned up to 49.9 percent by a venture capital firm.

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