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Eve Tahmincioglu

Primary author Eve Tahmincioglu has been covering small business and entrepreneurship for more than a decade. She regularly writes about small business issues for the New York Times and BusinessWeek's SmallBiz magazine. She also writes the Your Career column for MSNBC.com. She is the author of "From the Sandbox to the Corner Office."



Do real small businesses take venture capital?

Posted: Friday, April 25, 2008 4:15 AM by Eve Tahmincioglu
Filed Under: , , ,

If you are a small business owner who wants to land a government contract, you are not allowed to have venture capital dollars pumping into your company.

For some reason, that’s the way it’s been. Perhaps it was supposed to be a way to level the playing field, so small companies weren’t really deep-pocketed big companies in disguise.

But a bill that would eliminate the restriction, sponsored by U.S. Rep. Nydia Velazquez,  D-N.Y., who chairs the House Small Business Committee, was passed by the House this week. And that has some small business advocates up in arms.

"Our members and small businesses around the country are just stunned that Congresswoman Velazquez and her committee would pass legislation that will be so detrimental to small businesses,” said Lloyd Chapman, president of the American Small Business League, in a statement.  “No matter what she says, the bottom line is that this bill is going to allow billionaires to take contracts away from legitimate small businesses in every state.”

Velazquez doesn’t see it that way.

During a hearing on the bill, which would extend the Small Business Innovation Research  program and Small Business Technology Transfer program, she argued that entrepreneurs should be able to use venture capital whenever it’s available. “Small firms must not be penalized for accepting investment they need to advance their R&D efforts,” she said.



What’s your take on this?

Does it create an unfair advantage for those small firms lucky enough to get venture backing? Or does it open up the door to entrepreneurship by removing investment restrictions?

The bill passed the House 368-43, and it now goes onto the Senate. This is your chance to voice your concerns or support.

Chapman’s group is urging “concerned citizens and small business owners to contact their congressional representatives.”

No matter which side you’re on, that’s a good idea.

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Comments

...Not a problem.  I've personally just set up 6 computer related concerns with venture capital and obtained guaranteed government sales as a result of my veterans status and will look forward to the $225M I'll yank out of the government's back pocket while all you lambs are sitting there wondering what happened.

All bets are off, this is now a no-holds-barred free for all and all you tv watching, net surfing, Pepsi consuming slobs are just the collateral damage.  

Long live capitalism and the (un)free market economy and welcome to the New World Order!

QR Miller (Sent Friday, April 25, 2008 1:42 PM)

why on earth do we keep asking oursleves obvious questions? of course it's not a good idea. of course small businesses with piles of venture capital have greater opportunity to land these contracts (more money ALWAYS equals more opportunity. always. it's simple economics). and of course this will only give deep pocketed millionaires and billionaires another way to force their will upon the People -- just like they do it in politics.

and this isn't about penalizing rich folks, limiting their opportunities or placing unbearable restrictions on them. it's about leveling the playing field. period. the MOMENT the People allow riches to enter the fold, is the MOMENT they do and ONLY a bottom line matters...not the People.

we either want BIG MONEY out of every aspect of fair and equal opportunity in this country, or we don't.

which is it?

C. Michael (Sent Friday, April 25, 2008 1:45 PM)

We're trying to start a small minority business. All of us have jobs but the way the economy is we cant spare a dime for straup mone everywhere is a dead end.

jackie morrison riverdale ga (Sent Friday, April 25, 2008 2:34 PM)

QR Miller - you're a liar.

s (Sent Friday, April 25, 2008 3:11 PM)

That first ringer musta be the infamous spew gurglin Todd Miller, I recognize his laim spew anywhere. Capitalism you bet, anti-ethical, just his theivin fortee, after all, his squid brain is washed and nothing but evil darksidedness lurks...Yea, set up 6 fraud bustling sites no doubt, is all he knows to do. New world order ? I hardly think so son, there is simply nothing you think or thought of that has not been thought of long before you. So here's a towel, dry yourself behind your ears subpunky, and any day warlock, you wanna try for a real piece of me, imas right here, maybe right there soon, btw, howz give a hoot and his side licker pooh the rambut? timz a tickin boyz and I know where your names are and what scrolls they are on...I'll be waiting so keep talkin, we're listening...

Mox Meek, anywhere, global wide (Sent Friday, April 25, 2008 8:56 PM)

You folks missed the goal of the program--its not to support small businesses who think they need money--its to support the best new innovations that make the USA competitive in a world economy. So if you dont give money to VC-backed business, not only are supporting the worst technology that has tried and most likely failed to achieve VC investment, you are depriving the best innovations of capital.  All the Bill does is make it a competitive playing field. Non VC investments can still win if they can win the grants on technical merit. If the bill doesn't pass, its like putting our "C" students up against the world's best and keeping our varsity team home--and we will get our ass kicked.

Johnny the Monkey (Sent Saturday, April 26, 2008 10:56 AM)

The American Dream is no longer a reality.  Big businesses and technology university giants want it ALL.  Unfortunately this bill will give it to them.  

Shame on Velasquez for putting this through.  Goes to show that not only Republicans are in the corporate pockets.  Each person up for re-election needs to be judged on a case by case basis.  

Restore power to the people in November 2008 !

Marlena Gilbert (Sent Saturday, April 26, 2008 12:54 PM)



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