DENVER – The U.S. Small Business Administration is inviting experienced early stage investment fund managers to apply for licensing as part of SBA’s Early Stage Small Business Investment Company (SBIC) program. Licensed Early Stage SBICs may receive SBA-guaranteed debenture leverage up to a maximum of $50 million.
“Our Early Stage SBIC program offers fund managers access to low-cost capital for investing in promising young companies,” said Matt Varilek, SBA Region VIII administrator. “Through this public-private partnership, we can boost returns for fund investors, and assist more of the innovative early stage small businesses that are creating jobs across the country. To date, our region has not taken full advantage of this opportunity, so I strongly encourage interested parties to apply.”
By licensing and providing SBA guaranteed leverage to Early Stage SBICs, SBA seeks to expand entrepreneurs’ access to capital and encourage innovation as part of President Obama’s Start-Up America Initiative.
For the purposes of this initiative, an “early stage” business is one that has never achieved positive cash flow from operations in any fiscal year. Early Stage SBICs must invest at least 50 percent of their investment dollars in early stage small businesses, in return for access to SBA leverage and other program benefits.
The first required submission in the Early Stage Licensing process is SBA’s Management Assessment Questionnaire. The MAQ consists of two forms that cover qualitative and quantitative information on the management team, the proposed strategy for the SBIC, the principals’ investment track record, and the proposed fund structure and economics.