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SSBCI State Small Business Credit Initiative

Author: US Department of Treasury
Date: April 2013

Under the State Small Business Credit Initiative (SSBCI), thirty-three states received funding for a state venture capital (VC) program. As summarized in the Information and Observations Report on state VC programs that Treasury published in the spring of 2013, these programs are an important part of a comprehensive economic development strategy to create jobs and long-term economic growth. Although some states previously operated VC programs with state appropriations, managers had little opportunity to learn from each other’s experience. The allocation of SSBCI funds to state VC programs provides an opportunity to collect perspectives from a diverse group of professionals involved in this federal-state-private collaboration.
This paper compiles practical advice offered by program managers and for program managers. The paper aims to communicate best practices in an easy-to-read format for consideration and adaptation to local conditions.
A common motivation for states enacting VC programs is to address market inefficiencies in a region’s “financing life cycle” or “capital continuum” for high-growth businesses. These terms refer to the financing needs of a small business through phases of company development, from pre-revenue to profit generation. In these phases, demand by small businesses for risk capital is likely to exceed the available supply.


State VC programs that follow best practices are designed to stimulate and support private investment over time, rather than fill a capital markets gap with public funding alone. Furthermore, programs that follow best practice are designed to address identified market imperfections, not to interfere in efficient markets where private capital resources are sufficient to meet demand.

Geography: US

Source: US Department of Treasury

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