BIO lauds passage of small business investment program.
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Press Release Summary:
BIO lauded Congressional passage of Small Business Early-Stage Investment Program, which will provide $1 billion in grants for venture capital investments in certain industries. Measure is contained in Title III of H.R. 5297, the Small Business Lending Fund Act of 2010. Under program, SBA's investments would be treated the same as investments by other limited partners in investment fund, except that SBA would not receive any control or voting rights with respect to early-stage small business.
Original Press Release:
BIO Lauds Passage of Small Business Early-Stage Investment Program
Creates a $1 billion Fund for Venture Capital Investments
WASHINGTON, D.C. - The Biotechnology Industry Organization (BIO) today lauded Congressional passage of the "Small Business Early-Stage Investment Program," which will provide $1 billion in grants for venture capital investments in certain industries, including life sciences. The measure is contained in Title III of H.R. 5297, the Small Business Lending Fund Act of 2010.
BIO President and CEO Jim Greenwood issued the following statement:
"This economic climate has left many of today's most promising small businesses starved for investor capital, and has had an especially detrimental effect on America's biotechnology companies, whose numbers have shrunk by 25 percent in the past two years. Overwhelmingly comprised of small, early stage research and development-oriented companies, biotech companies are pursuing innovations that have the potential to improve human health, expand our food supply, and provide new sources of energy. They often require a decade or longer to bring to market new technologies and, as such, require risk capital.
"Our thanks go out to Rep. Nydia Velazquez, Chair of the House Small Business Committee, Rep. Barney Frank, Chairman of the House Financial Services Committee, and Rep. Glenn Nye (D-VA) for recognizing and addressing the funding shortfall facing many early-stage small businesses. By authorizing the SBA to issue $1 billion in grants to investment companies making investments in those industries most in need of early-stage capital, this legislation has the potential to significantly increase the flow of capital into small, early-stage biotechnology companies. In turn, the bill increases our likelihood of finding cures and treatments for patients, and high-paying jobs for American workers."
Under the program, the SBA's investments would be treated the same as investments by other limited partners in an investment fund, except that the SBA would not receive any control or voting rights with respect to the early-stage small business. Importantly, the new program protects the interest of the taxpayer by specifying that grants could only be awarded to investment companies that had already raised an equivalent amount of capital from private-sector sources. Ideally, over time, the SBA's investment program will become self-sustaining as funds from successful small businesses are repaid into a revolving fund.
About BIO
BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world's largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.
