/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?
Showing posts with label venture capitalist. Show all posts
Showing posts with label venture capitalist. Show all posts
Tuesday, March 3, 2009
Monday, January 12, 2009
Pelosi-Backed Loophole for Venture Capitalists Will Damage Middle Class Economy
/PRNewswire-USNewswire/ -- House Speaker Nancy Pelosi (D - CA) is leading congressional support for a new loophole in federal contracting law that will allow some of the wealthiest venture capitalists in America to receive federal contracts set-aside for small businesses.
The new loophole could divert billions of dollars in federal small business contracts away from middle class firms and into the hands of wealthy investors. If Congress does adopt legislation that allows venture capitalists to participate in federal small business contracting programs, thousands of middle class jobs could be lost as legitimate small businesses struggle to compete head-to-head with firms owned and controlled by billionaire investors.
In 2008, Speaker Pelosi backed H.R. 3567 and H.R. 5819, both of which would have allowed individual venture capitalists and even some of the nation's largest venture capital firms to take contracts meant for small businesses.
After leading the opposition against H.R. 3567, the American Small Business League (ASBL) was joined by the Small Business Administration (SBA), the U.S. Chamber of Commerce, the National Association of Government Contractors, the National Small Businesses Association, and the Bush White House.
The key element of the Pelosi-backed legislation is a change in the longstanding definition of a small business, which is defined in the Small Business Act as a firm that is "independently owned." Pelosi would like to see the definition changed to include firms that are not "independently owned" but actually owned and controlled by well-heeled venture capitalists.
Many of the top venture capital firms in America are located in or near Speaker Pelosi's 8th congressional district and according to MAPLight.org, from January 2005 to May 2008, Speaker Pelosi received a combined $108,400 from venture capital giant, Kleiner Perkins Caufield & Byers; pharmaceutical giant, Amgen Inc; and lobbyist, Akin Gump Strauss Hauer & Feld LLP.
The ASBL predicts that Speaker Pelosi may try to include a loophole for venture capitalists in any up-and-coming economic stimulus plan coming out of the House of Representatives, under the guise of "increasing access to capital" for small businesses.
In the past, the National Venture Capital Association (NVCA) has used the term "increasing access to capital" for small business to disguise legislation and policies designed to allow its members to take federal contracts earmarked for legitimate small businesses.
President-elect Barack Obama has also received significant contributions from the venture capital industry. His appointment of Karen Mills, a venture capitalist, as Administrator of the SBA is seen as a clear signal he will support legislation that will likely divert billions of dollars in federal infrastructure funds away from middle class firms, and into the hands of some of the nation's wealthiest investors.
The new loophole could divert billions of dollars in federal small business contracts away from middle class firms and into the hands of wealthy investors. If Congress does adopt legislation that allows venture capitalists to participate in federal small business contracting programs, thousands of middle class jobs could be lost as legitimate small businesses struggle to compete head-to-head with firms owned and controlled by billionaire investors.
In 2008, Speaker Pelosi backed H.R. 3567 and H.R. 5819, both of which would have allowed individual venture capitalists and even some of the nation's largest venture capital firms to take contracts meant for small businesses.
After leading the opposition against H.R. 3567, the American Small Business League (ASBL) was joined by the Small Business Administration (SBA), the U.S. Chamber of Commerce, the National Association of Government Contractors, the National Small Businesses Association, and the Bush White House.
The key element of the Pelosi-backed legislation is a change in the longstanding definition of a small business, which is defined in the Small Business Act as a firm that is "independently owned." Pelosi would like to see the definition changed to include firms that are not "independently owned" but actually owned and controlled by well-heeled venture capitalists.
Many of the top venture capital firms in America are located in or near Speaker Pelosi's 8th congressional district and according to MAPLight.org, from January 2005 to May 2008, Speaker Pelosi received a combined $108,400 from venture capital giant, Kleiner Perkins Caufield & Byers; pharmaceutical giant, Amgen Inc; and lobbyist, Akin Gump Strauss Hauer & Feld LLP.
The ASBL predicts that Speaker Pelosi may try to include a loophole for venture capitalists in any up-and-coming economic stimulus plan coming out of the House of Representatives, under the guise of "increasing access to capital" for small businesses.
In the past, the National Venture Capital Association (NVCA) has used the term "increasing access to capital" for small business to disguise legislation and policies designed to allow its members to take federal contracts earmarked for legitimate small businesses.
President-elect Barack Obama has also received significant contributions from the venture capital industry. His appointment of Karen Mills, a venture capitalist, as Administrator of the SBA is seen as a clear signal he will support legislation that will likely divert billions of dollars in federal infrastructure funds away from middle class firms, and into the hands of some of the nation's wealthiest investors.
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