Participating funds in SSBCI equity programs provide support for small businesses by investing as a limited partner to create and grow start-up businesses. The bulk of Louisiana’s $113 million SSBCI allocation – up to $91.5 million – is allocated to the state’s two equity programs: venture capital and seed capital. Disbursement of the full amount is dependent on hitting federal funding benchmarks for very small businesses with fewer than 10 employees (VSBs) and businesses owned by socially and economically disadvantaged individuals (SEDIs) whose access to capital may have been limited in the past.
Seed Capital Program (Seed)
The Louisiana Seed Capital Program provides financing to start-up businesses and early-stage small businesses. The LSCP is intended to assist Louisiana small businesses expand through the support of seed capital funds. LED will deliver the LSCP to market by working with approved Louisiana based program participants such as venture capital funds, angel funds and nonprofit organizations. The approved program participants will provide private financing through seed stage investments to start-ups and early-stage small businesses in order to create jobs and improve the state’s economy.
Venture Capital Program (VC)
The Louisiana Venture Capital Program is a revision of an existing LEDC program aimed to assist Louisiana small businesses expand through the support of venture capital funds. The LVCP, with the use of SSBCI funds, will join with venture capital funds, angel funds, and non-profit organizations to create partnerships into a new venture capital fund. Each fund will provide private financing through investments to small businesses in order to create jobs and improve the state’s economy. Investments may be made by the purchase of common stock, preferred stock, partnership rights, or other equity investment. Additionally, it may mean debt positions, which may act as equity or have equity features such as subordinated debt, debentures or other such instruments used in conjunction with features intended to yield significant capital appreciation.
Both equity programs, Seed and VC, will target small businesses defined as VSBs and SEDIs as defined by the U.S. Department of Treasury. Read more here.
*Please note: SSBCI has been authorized for seven years and is in its early stages. The list of participating equity funds, and the process for applying, will evolve in the coming months as the program matures. The Seed and VC fund list will be updated as changes occur. To receive email updates about the latest SSBCI news and information, click here and check the SSBCI box. If you have a question for the Louisiana SSBCI team, email [email protected] or call 833.457.0531.