Why The SBIC Doesn’t Work For Venture Capital Anymore

Feld Thoughts

I woke up to an article in Daily Camera today titled Small Business Administration trying to bring SBIC funds to Colorado. I’m an investor in over 40 VC funds around the world (mostly in the US) and three of them are SBIC funds. Each of the SBIC funds were raised in the 2000 – 2002 time period. On paper, only one is in positive return territory as a fund, but the SBIC leverage is a substantial negative factor for the LP investors in that particular fund.

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A Venture Capital History Perspective From Jack Tankersley

Feld Thoughts

For example, my firm at the time, Continental Illinois Venture Corporation, the wholly owned SBIC of Chicago’s Continental Bank, had many successful investments. Highly regarded private SBIC, **Sutter Hill Affiliate, Norwegian Shipping Family, +B of A’s SBIC. In January, Jerry Neumann wrote a long and detailed analysis of his view of the VC industry in the 1980’s titled Heat Death: Venture Capital in the 1980’s.

Trending Sources

The SBIC Program ? An Alternative Source of Capital for Private Investment Funds

Recent Buzzes - VC Experts, Inc.

In this challenging fundraising environment, private equity ("PE") managers have shown increased interest in obtaining capital through the Small Business Investment Company ("SBIC") program, which provides attractive loans to PE firms licensed by the Small Business Administration (the "SBA") for the purpose of financing small businesses.

SBA 0

Welcome to SBA Ventures LLC.

Inc Startups

By contrast, the traditional SBIC program is structured such that debentures are senior to equity, meaning the SBA gets paid back first in the event of a default. In the next 30 days, Hatteras says it plans two investments from the SBIC portion of the fund.

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What Makes a Successful Startup Community? Is it Possible to Build One Where You Live?

Both Sides of the Table

” And if aspiring investment teams are looking to get together the SBIC has come back with a new VC focused program to help non-Silicon Valley communities fund companies beyond their initial angel money. This article originally appeared on TechCrunch.

Startup Business Development Strategies: 7 Tips For Putting.

Seed Stage Capital

skip to main | skip to sidebar 24 January 2010 Startup Business Development Strategies: 7 Tips For Putting Together Stellar Deals Business development is fun.

Small business Congress-watch: Three Pending Bills and Why They Matter

crowdSPRING Blog

511: EXCEL Act (Introduced 3/11/2013) The EXCEL (Expanding Access to Capital for Entrepreneurial Leaders) Act amends the Small Business Investment Act of 1958 and seeks to guarantee the payment of securities issued by small business investment companies (SBICs) of up to $4 billion annually. I have written occasionally about legislation in Congress and how it impacts small businesses and startups, and three proposed laws have recently caught my attention.

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Coming Soon: A Game Of Startup M&A Musical Chairs

Seed Stage Capital

skip to main | skip to sidebar 17 January 2011 Coming Soon: A Game Of Startup M&A Musical Chairs Several weeks ago, I organized an event called StartupExits.com , where Naval Ravikant of Venturehacks gave an excellent keynote called, "The Rise of the Super Angels" (you can watch Navals video here ).

Startup Valuation: How Much Is Your Company Worth?

Seed Stage Capital

skip to main | skip to sidebar 19 January 2010 Startup Valuation: How Much Is Your Company Worth? Part of my job description involves prepping startups to raise capital. One of the most common issues that concern entrepreneurs is how to address the "Valuation Question."

Hello, Middle America. The SBA Wants to Get You Funded.

Inc Startups

Patient Growth Capital: One of the most important tools we have at the Small Business Administration (SBA) to reach high growth entrepreneurs is the Small Business Investment Company (SBIC) program. Some 70% of start-up capital goes to just three coastal states.

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What Startups Can Learn From Sailors (Part Deux.

Seed Stage Capital

skip to main | skip to sidebar 04 June 2011 What Startups Can Learn From Sailors (Part Deux) Note: This is the second installment of a series that draws parallels between sailing and running a startup. The first installment can be found here.

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Former SBA Chief Karen Mills on How to Jump Start the Economy Now

Inc Startups

The SBIC program deployed $3 billion in capital to such entrepreneurs in 2013. The worst of the recession may be over, but Karen Mills says now''s the time to invest in infrastructure. What your business and the U.S. need now is infrastructure investment.

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Deals Gone WIld (aka "What Drives Massive Startup Valuations?")

Seed Stage Capital

skip to main | skip to sidebar 11 January 2011 Deals Gone WIld (aka "What Drives Massive Startup Valuations?")

The Lowdown on Obama's Small Business Plan

Inc Startups

Then there's the president's proposal to add $1 billion to the amount of federal funding available to SBICs, or Small Business Investment Companies. In 2011, 34 percent of SBIC investments went to companies that fit one of those descriptions.

Why You Should Care About Mezzanine Financing

Inc Startups

Small Business Administration website, which provides information about SBIC programs. There aren''t that many opportunities to raise growth capital without selling a big chunk of equity. Mezzanine financing is one of them.

Startup Financial Models and Forecasts: Part II.

Seed Stage Capital

skip to main | skip to sidebar 11 July 2011 Startup Financial Models and Forecasts: Part II Note: in my first segment on startup financial models, I discussed the reasons why an entrepreneur should build a startup financial model. You can read that post here.

The Secret History of Silicon Valley 12: The Rise of “Risk Capital.

Steve Blank

The Small Business Investment Company (SBIC) Act in 1958 guaranteed that for every dollar a bank or financial institution invested in a new company, the U.S. Was it using government money as a private SBIC firm?

More SBA Funding for Startups? Maybe. | VentureArchetypes Blog.

Seed Stage Capital

One is about increasing SBIC funding; Im hugely in favor-- to me thats a no-brainer. Posted by Nathan Beckord, CFA at 3:24 PM Labels: SBA and SBIC for startups 0comments: Post a Comment Newer Post Older Post Home Subscribe to: Post Comments (Atom) Like this article?

In Praise of "Dumb Money"

Seed Stage Capital

skip to main | skip to sidebar 04 January 2010 In Praise of "Dumb Money" I am frequently contacted by startup founders seeking help raising an angel round of capital.

When Is A Startup "Venture Fundable?"

Seed Stage Capital

skip to main | skip to sidebar 12 July 2010 When Is A Startup "Venture Fundable?" I spend a healthy chunk of my time helping startups think through their capital raise strategies.

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Startup Acquisitions: Exit Strategy

Seed Stage Capital

skip to main | skip to sidebar 28 July 2010 Startup Acquisitions: Exit Strategy We recently put together our "thought piece" on the dynamic world of startup M&A.

Financial Modeling for Startups-- How Much Will It Really Cost?

Seed Stage Capital

skip to main | skip to sidebar 08 October 2009 Financial Modeling for Startups-- How Much Will It Really Cost? I came across this blog entry from Christine Herron of First Round Capital detailing the costs of starting web wunderkind Mint.com (acquired by Intuit for a handsome $170M).

Wisdom from Marc Andreessen | VentureArchetypes Blog: Seed Stage.

Seed Stage Capital

skip to main | skip to sidebar 06 July 2009 Wisdom from Marc Andreessen Marc Andreessen is an amazing guy. He co-founded Napster, Ning, and LoudCloud (later changed to OpsWare). Hes made investments in Twitter and Digg. He sits on the boards of Facebook and eBay.

The Case for Taking a VC's Money (even if you don't need it.

Seed Stage Capital

Basic (But Solid) VC Pitching Tips | VentureArchetypes Blog: Seed.

Seed Stage Capital

skip to main | skip to sidebar 19 June 2009 Basic (But Solid) VC Pitching Tips I stumbled across this blog this morning called Startable, co-written by an entrepreneur and a former VC with Atlas Ventures. They have compiled some pretty useful content and pitching tips.

Things A Founder Will Never Say | VentureArchetypes Blog: Seed.

Seed Stage Capital

Things A VC Will Never Say | VentureArchetypes Blog: Seed Stage.

Seed Stage Capital

skip to main | skip to sidebar 09 June 2009 Things A VC Will Never Say Lets start off the day with a little VC humor.this slide deck, modeled off the "Successories" line of motivational posters (favored by Michael Scott in the Office), accurately sums up a few of the more common VC sentiments.

apple's business plan and offering memorandum

Seed Stage Capital

skip to main | skip to sidebar 08 June 2009 Apples Business Plan and Offering Memorandum Apple is one of the most fascinating companies, ever.

vc blog lists and rankings

Seed Stage Capital

More on M and A for Startups | VentureArchetypes Blog: Seed Stage.

Seed Stage Capital

skip to main | skip to sidebar 05 May 2009 More on M and A for Startups Continuing the thread on M and A as an exit alternative, here is a good post from the WSJ about positioning your startup to be acquired. link] I particularly like these tips: "Look at it from the acquirer’s perspective."

Acquisition As An Exit Alternative | VentureArchetypes Blog: Seed.

Seed Stage Capital

Tough Market for Entrepreneurs? VC Firms Are Having a Rough Go Of.

Seed Stage Capital

skip to main | skip to sidebar 21 April 2009 Tough Market for Entrepreneurs? VC Firms Are Having a Rough Go Of It As Well.

Positioning for a Startup Market Turnaround | VentureArchetypes.

Seed Stage Capital

in search of.the ideal term sheet

Seed Stage Capital

skip to main | skip to sidebar 24 August 2009 In Search Of.The Ideal Term Sheet Continuing with our discussion on term sheets (see "Some Thoughts on Term Sheets" and "Closing Term Sheets Quickly" ), today a new "plain vanilla" term sheet was published by Adeo Ressi of TheFunded.com.

Key Elements for Selling Your Company | VentureArchetypes Blog.

Seed Stage Capital

skip to main | skip to sidebar 28 May 2009 Key Elements for Selling Your Company My friend (and former VentureArchetypes colleague) Jake Kaldenbaugh turned me on to this blog post by Matt McCall. Matt is a Chicago VC and MD at DFJ Portage VP (just to throw a few mysterious acronyms at you).

some thoughts on term sheets

Seed Stage Capital

skip to main | skip to sidebar 19 May 2009 Some Thoughts on Term Sheets I am often asked by the startup companies I work with for a "typical" term sheet they can use as a benchmark when negotiating with investors.

Should Government Help Fund Startups? | VentureArchetypes Blog.

Seed Stage Capital

skip to main | skip to sidebar 18 May 2009 Should Government Help Fund Startups? Ive been running an ongoing, informal debate about the role government should play in encouraging entrepreneurship.

the best funding strategy of them all: none

Seed Stage Capital

skip to main | skip to sidebar 18 May 2009 The Best Funding Strategy Of Them All: None This blog is generally about all things early stage capital related, but here is a good list of the best strategy of them all: bootstrapping.

closing term sheets quickly (+ avoid the co-investment term sheet)

Seed Stage Capital

skip to main | skip to sidebar 01 May 2009 Closing Term Sheets Quickly (+ Avoid the Co-Investment Term Sheet) Heres an interesting post from the guys over at VentureHacks about closing term sheets quickly. link] I like the advice.one of the biggest pains is to get VCs to move on your timetable.

A "4-Pillar Plan" to Fix the IPO Market | VentureArchetypes Blog.

Seed Stage Capital

skip to main | skip to sidebar 29 April 2009 A "4-Pillar Plan" to Fix the IPO Market Dixon Doll and the National Venture Capital Association have put together a "4-Pillar Plan" to restore liquidity to the IPO market (see bottom of this post for the link).