NEW MARKETS VENTURE CAPITAL (NMVC) PROGRAM（三）.pptVIP

NEW MARKETS VENTURE CAPITAL (NMVC) PROGRAM Typical NMVC Company 10-year limited partnership (“LP”) Funded with LP commitments Years 1-5: makes approximately 20 investments Years 6-10: creates value and liquidity Management shares in profits Capital requirements: Minimum $5 million of private capital from non-Federal sources Minimum $1.5 million of matching grant resources from non-SBA sources Unique Features of an NMVC Company “Double bottom line” of both financial return to investors and improvement of LI areas Provides intensive operational assistance to small business directly or through third parties, e.g. accountants Fund manager controls investment funds and grant money. If done well, this benefits both small business and fund investors Advantages to Investors Low cost 1:1 leverage on equity from SBA-guaranteed debentures Fund manager directs no cost grant funds for 60% more resources to enhance investments ($3.0 MM /$5.0MM equity) Potential New Markets Tax Credit up to 39% over 7 years CRA credit for financial institutions Advantages to Portfolio Companies Long term risk capital Proactive investor No cost operational assistance NMVC Program Funding Fiscal Year 2001 funding by Congress: $150 million for debenture guarantees ($100 million discounted amount) $30 million for operational assistance grants Total public/private resources: $200 million for investing $60 million for operational assistance Terms of Operational Assistance Grants Dollar-for-dollar match required (up to 50% in-kind contribution permitted) Disbursed over 4.5 years Must not be used for general and administrative expenses, including overhead SBA Oversight Annual compliance examinations Grant funding subject to audit Annual financial reports and additional reports are required Cross default between grant award and debenture guaranty NMVC Investing At least 80% of the businesses in which the NMVC Company makes investments must: Be “smaller enterprises” Receive “equity capita