[Posted on October 8, 2007 - 6:22 PM]
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DiggFederal legislation sought by the biotech industry is a step closer to removing hurdles that blocked venture-backed companies from programs that foster small business.
The U.S. House of Representatives recently passed legislation to allow companies backed by venture capital firms to be eligible for federal small-business programs, without defining eligibility by the size of their owners. The Senate will soon consider similar legislation.
Under current rules of the U.S. Small Business Administration, investor-backed startups are not considered to be independently owned and operated, and therefore aren't eligible for SBA awards. Under the new rules, VC backing would not be held against a company unless one investor owned more than half of the shares.
Some small-business groups have opposed the new legislation, maintaining that since venture-backed companies are still eligible to receive aid until institutional ownership exceeds 50%, the small-business distinction is relevant. - Clifford Carlsen
See Oct. 8 story from bizjournals.com
See Sept. 26 story from earthtimes.org
