Evan Vitale

Accounting Professional

Evan Vitale – The SBA and Venture Capital

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By Evan Vitale

The Small Business Administration has, among other informative web pages helping businesses on a variety of topics, an interesting section explaining venture capital.

The SBA’s “Venture Capital” page (https://www.sba.gov/content/venture-capital) features several sub-sections including:

  • About Venture Capital
  • Understanding Venture Capital
  • Angel Investors
  • Understanding Equity Capital
  • The Venture Capital Process

The primary “About Venture Capital” page fully defines venture capital and how it differs from other traditional financing. For example:

“Venture capital is a type of equity financing that addresses the funding needs of entrepreneurial companies that for reasons of size, assets, and stage of development cannot seek capital from more traditional sources, such as public markets and banks. Venture capital investments are generally made as cash in exchange for shares and an active role in the invested company.”

“The Venture Capital Process” section offers detailed information on submitting a business plan, conducting due diligence, investment, execution with VC support and exit.

The information, while accurate and short, doesn’t offer any opinions as to the positives and negative reasons why a startup would want to seek out (or avoid) venture capital.

The Venture Capital section is a sub-section of the “Finance Your Business” which also includes sub-sections on loans and grants – all of which is a chapter in the SBA’s “Starting a Business” category.

The Loans section references SBA Loans; a Business Loan Application Checklist; SBA Loan Application Checklist, and Acquiring Financing.

The Grants section offers a brief explanation about grants and notes that the federal government does not provide grants for starting or expanding a business. Some grants, however, are available through state and local programs.

Of note, the “Starting A Business” guide does include a section on “Filing and Paying Taxes” as well as sections covering “Business Law;” “Hiring Employees;” “Registering Your Business” and more.

You can see the full section here:

https://www.sba.gov/category/navigation-structure/starting-managing-business