The U.S. Small Business Administration (SBA) has launched a new national fund facilitating equity investments in technology and clean tech companies as part of a broader initiative aimed at investing up to $1.5 billion in high-growth small business. This fund will be managed by SJF Ventures, a Durham-based venture capital firm that has backed small businesses that benefit the environment or low income communities for a dozen years.
Through this new initiative, the SBA has committed $1 billion to investing in small businesses within underserved markets or in industry sectors that have been identified by the current administration as national priorities, such as clean energy and education. Underserved markets might include those businesses that are either situated in or employ residents of economically distressed areas or low- to moderate-income communities. Both of these areas were targeted by the Obama administration last year for additional funding measures.
This effort is part of the White House initiative Startup America, charged with bringing together public and private organizations to accelerate the growth of entrepreneurship in this country. This program relies on the infrastructure of the SBA’s Small Business Investment Company (SBIC) program, which has been in place for over 50 years with the aim of supplementing the flow of both private equity capital as well as long-term loans to small businesses. Such leading enterprises as Apple, Intel, and Costco all benefited from this program during their early start-up days. In the fiscal year 2011, the SBIC program funneled $2.8 billion in financing to 1,339 small businesses across the country.
SJF is the first nationally focused firm to receive the designation of “impact investment fund,” a status granted to companies aimed at investing both for financial return but more importantly for social return. The SJF fund will commit up to $75 million in investment funds over the next 5 years.
Kamerick, Megan. “SBA Launches Nationwide Fund to Invest $1.5B in Small Biz.” Austin Business Journal. 3/12/12. (3/12/12.) http://www.bizjournals.com/austin/blog/abje_news/2012/03/sba-launches-nationwide-fund-to.html.
SBA. “SBA Licenses First Nationwide Impact Investment Fund.” SBA.gov. 3/8/12. (3/12/12.) http://www.sba.gov/about-sba-services/7367/125531.
Tozzi, John. “A Government Nod for Companies Doing Good.” Bloomberg Businessweek. 3/12/12. (3/12/12.) http://www.businessweek.com/articles/2012-03-12/a-government-nod-for-companies-doing-good.