/PRNewswire-USNewswire/ -- President Barack Obama is expected to support legislation or policy that will allow wealthy venture capitalists to dominate federal programs designed to assist small businesses. If he is successful, it will force thousands of small businesses to close their doors and cost countless American jobs. (http://www.vcjnews.com/story.asp?sectioncode=26&storycode=46450)
The Small Business Act requires that a small business be "independently owned." Firms that are owned and controlled by venture capitalists are not considered small businesses in federal small business contracting and grant programs.
The venture capital industry, led by the National Venture Capital Association (NVCA), has spent millions of dollars lobbying members of Congress to change the current definition of a small business to allow even billionaire venture capitalists to own a controlling interest in a small business and still qualify as participants in federal small business programs. Small business advocates are concerned that such a change would set a dangerous precedent for venture capital participation in all federal small business programs, and lead to the diversion of billions more in federal small business contracts to wealthy venture capitalists.
The American Small Business League (ASBL) is concerned that President Obama may attempt to sell federal small business programs to the venture capital industry by pushing Congress to add language to the omnibus spending bill, making changes to existing Small Business Administration policy or by issuing an executive order.
According to MAPLight.org, the venture capital industry contributed more than $1.2 million to President Obama's campaign. Additionally, the venture capital lobby has focused its campaign to buy political influence on key democratic leaders like Speaker of the House Nancy Pelosi (D - CA) and Senator John Kerry (D - MA). (http://www.maplight.org/map/us/interest/F2500)
Small business advocates point to the appointments of venture capitalist and Tootsie Roll heiress Karen Gordon Mills to run the Small Business Administration (SBA) and Julius Genachowski of Rock Creek Ventures to head the Federal Communications Commission (FCC) as further indications that President Obama may support the interests of the venture capital industry over small businesses.
"Small businesses are the engine that drives this nation's economy in the car that takes Americans to work. That 'car' is responsible for nearly all-new jobs. President Obama needs to consider America's 27 million small businesses before he facilitates the wholesale diversion of billions of dollars in small business grants and contracts to some of our nation's wealthiest investors," ASBL President Lloyd Chapman said. "Legislation or policy that will allow venture capitalist-owned firms to participate in small business programs would damage our nation's small businesses, cost America's middle class billions and push our country further towards a depression. It is just not reasonable."
Two questions for President Barack Obama from the American Small Business League (ASBL):
How much longer will you allow Fortune 500 firms to take federal small business contracts?
Why didn't you push congress to allocate some of the stimulus bill spending to small businesses, the firms that create 97 percent of net new jobs?