Will Venture Capitalists Steal Small Biz Federal Contracts?
According to the American Small Business League, Nancy Pelosi is backing a loophole in the Obama stimulus plan that will damage the middle class economy by allowing venture capitalists to steal government contracts earmarked for small businesses. The loophole would involve changing the current definition of a small business, which is currently defined as “independently owned,” to include firms that are not independently owned, but rather owned and controlled by wealthy venture capitalists.
The ASBL is concerned that both Pelosi and Obama have been influenced by political contributions received from the venture capital industry. They report that Pelosi received $108,400 from venture capitalist firms between January 2005 and May 2008, and President Barack Obama has also received considerable contributions from the industry. Additionally, they are concerned about Obama’s recent appointment of Karen Mills, a venture capitalist, as new head of the Small Business Administration.
If Congress adopts new legislation that allows venture capitalists to participate in federal small business programs, the ASBL warns that billions of federal infrastructure funds could land in the hands of wealthy venture capitalists, and thousands of middle class jobs could be lost while small businesses struggle to compete with billionaire investors. The ASBL predicts that Pelosi will try to include a loophole for venture capitalists in the new economic stimulus plan, and will defend it as a means for small businesses to access more capital.
