What limitations are imposed on an NMVCCs investment activities?
At least 80% of the businesses in which an NMVCC makes investments must be smaller enterprises located in LI areas and must have received equity capital investments. In addition, 80% of the investments an NMVCC makes (in total dollars) must be equity capital investments in smaller enterprises located in LI areas. A “smaller enterprise,” as defined in 13 CFR 108.50, is a small business concern that: · has $6 million net worth and an average after-tax income not exceeding $2 million for the preceding 2 years, or · meets SBA’s size standards based on revenue or employment criteria. “Equity capital investments,” as defined in 13 CFR 108.50, are investments in the forms of: · common or preferred stock · limited partnership interests · options, warrants, or similar equity instruments · subordinated debt with equity features as long as the debt is not amortized and provides for interest payments contingent upon and limited to the extent of earnings A smaller enterprise located in an LI area i
