Venture Capitalists Move to Hijack Government Small Business Contracts

FOR IMMEDIATE RELEASE
January 28, 2009

Petaluma, Calif. - The National Venture Capital Association (NVCA) and its members have launched a well-financed campaign of political contributions and lobbying in hopes of raiding federal small business contracting programs.

For over two years, the NVCA and some of its wealthiest members have been on a mission to have the longstanding federal definition of a small business as "independently owned" modified to include firms that are not independently owned, but controlled by some of the nation's wealthiest investors.

Historically, venture capitalists have attempted to disguise legislation and policies to take over federal small business contracting programs as policies to "increase access to capital for small businesses."

The NVCA has blanketed both the House and Senate small business committees with contributions. Millions of dollars in campaign contributions have been dealt out to key Democratic leaders like Speaker of the House Nancy Pelosi (D - CA) and Senator John Kerry (D - MA). According to MAPLight.org, President Barack Obama received more than one million dollars in campaign contributions from venture capitalists during his campaign. (http://www.maplight.org/map/us/interest/F2500)

Opponents of the NVCA campaign to hijack federal small business contracting programs believe President Obama's appointment of multi-millionaire venture capitalist Karen Mills to head the Small Business Administration (SBA) could indicate that the NVCA has been successful in buying influence with the White House and the democratically controlled Congress.

In the past, the NVCA's efforts to muscle in on federal small business contracting programs have been opposed by the Bush White House, the SBA, the United States Chamber of Commerce, the American Small Business League (ASBL) and hundreds of small business advocacy groups and chambers of commerce across the country.

With help from President Obama and House Speaker Nancy Pelosi, venture capitalists may try to slip language into the Obama stimulus plan that will modify the definition of a small business, which the Small Business Act currently defines as a firm that is "independently owned."

If the NVCA is successful, the ASBL projects that thousands of middle class jobs could be lost as small businesses across the country are forced out of business, due to a small number of firms controlled by wealthy investors dominating federal small business contracting programs.

"This is not about increasing small businesses access to capital. This is about increasing access to billions of dollars in federal small business contracts for some of our nation's wealthiest venture capitalists. It's unthinkable that President Obama would support policy changes that could devastate so many hard working small businesses as America faces its worst economic downturn since the great depression," ASBL President Lloyd Chapman said.

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