Alternatives to Venture (Vulture) Capital Financing

24 Sep Alternatives to Venture (Vulture) Capital Financing

Venture Capital Financing

Venture (Vulture) Capital Financing

If you are a business owner seeking equity investment or subordinated debt loans you should know about two relatively unknown funding programs available to U.S. companies, before you seek “Vulture Capital Financing”. This month’s speaker, Sam Thacker will discuss the pros and cons of obtaining growth capital from venture capital firms and Small Business Investment Companies (SBICs) and Business Development Companies (BDCs).

“Small Business Investment Company” or an SBIC is a privately owned investment company that is governed and licensed by the Small Business Administration. SBICs either make equity investments into company or make subordinated debt loans. They are regulated private funds that must follow a specific set of rules set forth by the SBA. SBIC’s have been around for over 50 years, and were designed to channel growth capital to small businesses. There are approximately 350 SBICs in the United States and which have made over $1.8 billion in capital commitments. SBIC funding may be an option for companies are looking for start-up capital, growth capital, or mezzanine capital.

Another relatively unknown funding source is “Business Development Companies” or BDCs. These are private companies that have been created to help start ups and initial stage companies grow. They were created by Congress in 1980, but few business owners have ever heard of them. BDCs are very similar to venture capital funds; however they are regulated investment companies like SBICs. All of them are publicly traded companies that are listed on the NYSE, AMEX and Nasdaq. A major difference between a BDC and a venture capital fund is that BDCs allow smaller, non-accredited investors to invest in start-up companies.

On Thursday, September 25th, Sam will speak about how these two types of regulated investment companies can help small and mid-sized businesses, and how:

  • SBICs and BDCs are different than “Vulture Capital Financing”
  • To find the right SBIC or BDC?
  • SBICs fund company growth
  • To prepare for the evaluation and investment process

If your company is commercializing a product or service, or growing to the next level, this presentation will help you better understand venture capital financing and other options for growth capital.

About our speaker

Sam Thacker has been a commercial banker or consultant to SBICs since 1994. Companies that have difficult financing challenges turn to him for help. He is the co-owner of Austin based Business Finance Solutions and can be reached at 512-657-7552.

To RSVP for this special event visit: Austin Small Biz Operations & Finance Gorilla Group.

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