For the second time, Congresswoman Nydia Velazquez (a Democrat from New York) is trying to push a bill that will likely spell disaster for many small businesses in the United States. If the bill passes, small businesses will be forced to compete with firms that are controlled by multi-billion dollar venture capitalist firms.
Velazquez is proposing that Congress amend the Small Business Act by modifying the definition of a small business. The current Act has been in force for 55 years. The Small Business Innovation Research (SBIR) Program Re-authorization Act stands to change the definition of a small business, which is currently “independently owned” to instead include companies that are owned by up to 49.9 percent of venture capital firms.
With billions of dollars of federal spending money currently being allocated to legitimate small businesses, there is certainly reason to worry. Competition is difficult enough without having to go up against wealthy investors as well. Will this new change cause small businesses to close their doors because they cannot compete?
The House of Representatives passed a bill in 2007 which contained almost exactly the same wording as this new draft does. It received fierce opposition and died in the Senate Committee on Small Business and Entrepreneurship. Now it seems that it has raised its ugly head once again. This time it is more hush-hush.
Please check back on Wednesday for the conclusion to this post.
