Government-Enhanced Equity Available for Investment in Traditional Venture Capital and Buyouts: The New SBIC Participating Securities Program

Saturday, January 1st, 1994 at 12:00 am by Joseph W. Bartlett
Joseph W. Bartlett, Government-Enhanced Equity Available for Investment in Traditional Venture Capital and Buyouts: The New SBIC Participating Securities Program, 1994 Colum. Bus. L. Rev. 589

The Small Business Administration (the “SBA” or the “Agency”) *590 on Friday, April 8, 1994, amended its Regulations respecting Small Business Investment Companies (“SBICs”) in regard to leverage, so-called participating securities and SBA remedies in the event a licensee runs into trouble. The amendments also liberalize the size standards for eligible investments by SBICs. Herewith follows a preliminary analysis of the new Regulations, which amend the proposed Regulations originally published on August 5, 1993 (with respect to participating securities and remedies) and on July 29, 1993 (with respect to size standards). Given the Administration’s dollar commitment to the program, it is likely that SBICs will once again become serious players in buyouts and early-stage finance.

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Partner, Mayer, Brown & Platt