Kerry, Snowe Expand Venture Capital Opportunities for Small Business

Legislation promotes investment in low-income communities, business

expansion

    WASHINGTON, June 21 /PRNewswire-USNewswire/ -- Senators John Kerry
 (D-Mass.) and Olympia J. Snowe (R-Maine), Chairman and Ranking Member of
 the Committee on Small Business and Entrepreneurship, introduced two bills
 this week to foster more equity investment in America's small businesses.
 Kerry will host a roundtable discussion today with venture capital experts,
 business groups, venture capital firms, and successful small businesses
 that have received capital through government-backed private equity funds
 to get input on legislation to improve the Small Business Investment
 Company (SBIC) and New Market Venture Capital (NMVC) programs.
     "Massachusetts ranks second in the country in venture capital
 financings, with more than 37,000 employed by government-backed small
 business investments. If not for the Small Business Investment Company
 program, many of these small businesses would not have access to venture
 capital funds. But Washington can do more to foster public-private
 partnerships that leverage critical venture capital for small businesses,"
 said Kerry. "Our proposals will attract new investors to back great ideas
 and stimulate economic development in impoverished rural, urban and
 low-income areas. This will help small businesses jump-start local
 economies, create thousands of jobs, develop new technologies, and keep our
 country competitive in the global marketplace."
     "For entrepreneurs and other aspiring small business owners, a self-
 evident truth since the founding of our country is that it takes money to
 make money. Our legislation makes that goal a little easier for aspiring
 small business owners by ensuring that our entrepreneurs have access to the
 resources they need so they can continue to drive America's economic growth
 and job creation," said Senator Snowe.
     Since 1958 when the SBIC program was created, more than 100,000 small
 businesses have received $48 billion in investments. Last year, SBIC
 financing totaling more than $21 billion supported over 2,000 small
 businesses which employed 286,000 people. The program was designed to help
 small businesses acquire venture capital through government-backed private
 equity funds when capital through banks and other traditional sources was
 not obtainable. Companies like Intel, Quiznos, Jenny Craig, Federal
 Express, and Outback Steakhouse are all SBIC success stories.
     The Small Business Venture Capital Act of 2007 will reauthorize the
 SBIC program through 2010, ensuring the continued availability of needed
 venture capital for small firms. It will also simplify the program's
 regulations, encouraging new and existing investors to increase their
 involvement.
     Kerry and Snowe also introduced the Securing Equity for the Economic
 Development of Low Income Areas Act of 2007, or the SEED Act, to promote
 venture capital investment in rural, urban and low-income areas. The bill
 improves the New Markets Venture Capital program which Kerry helped create
 in 1999. The NMVC program was designed to promote economic development,
 business investment, productive wealth, and stable jobs in communities
 where there is little to no sustainable economic activity but many
 overlooked business opportunities. Unfortunately, the program expired last
 year.
     Specifically, the SEED Act will reauthorize the program for the next
 three years until 2010, making it possible for the Small Business
 Administration to license up to 20 more New Markets Venture Capital funds.
 These funds will have the potential to leverage a total investment of $250
 million in small businesses in low-income areas, with $150 million backed
 by the government.
 
 

SOURCE U.S. Senate Committee on Small Business and Entrepreneurship