Should VC-backed startups qualify for federal small business benefits?
| August 15, 2008 |  View for printing |
"Thousands of legitimate small businesses across America could be forced to close their doors if the legislation becomes law."
A small business advocacy group is calling out U.S. House of Representatives Speaker Nancy Pelosi, D.-Calif., for pushing through legislation that would help companies backed by venture capital to qualify for federal loan guarantees, fee waiver grants and other benefits available under the U.S. Small Business Administration's "innovation research," or SBIR, program. Among other effects, the bills modify the definition of a small enterprise under the Small Business Act, which extends only to companies that are independently owned. In effect, that would allow companies financed by well-heeled VCs to elbow aside genuinely needy small businesses for access to the federal program, the group says, accusing Pelosi of acting on behalf of the many venture investors that operate near her home district in San Francisco.
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