Not every small business advocate is on board with President-Elect Obama’s stimulus plans. The benefits to small businesses are still unclear, which is one reason why a refund on business taxes has made its way into the plan, according to the Associated Press.
The American Small Business League (ASBL) has also expressed a concern which is under-reported in the media. In an editorial in The Exception Magazine, ASBL President Lloyd Chapman argues that Obama’s plans could include loopholes which benefit the President-Elect’s wealthy venture capitalist donors at the expense of small business owners.
- One of the most likely changes we could see in an Obama stimulus plan is an attempt to modify the Small Business Act’s definition of a small business as being “independently owned.”
- The National Venture Capital Association (NVCA) and it’s well-heeled members want the definition of a small business as “independently owned” changed to include firms that are actually not independently owned, but controlled by some of the wealthiest individual venture capitalists in the country and possibly even some of the country’s largest venture capital firms.
- Over the last few years, the NVCA and its members have spent millions of dollars lobbying Congress for changes in federal small business policies that would allow them to hijack billions of dollars in federal contracts earmarked for small businesses.
- The colossal loophole for venture capitalists will be sold to the press and the public as a necessary change to “increase access to capital” for small businesses as a means of stimulating the economy.
Do you agree with Mr. Chapman’s assessment? Will small businesses lose vital federal contracts if the definition of “independently owned” is changed? Does it matter if VC-backed firms can now access this capital, since they are investing in start-up ventures anyways? Join the discussion below.
