Unlocking the Potential of Small Business Investment Companies ("SBICs") - Using SBICs as Part of Your Next Fund
Thursday, March 18, 2010
Small Business Investment Companies have become increasingly popular as a fund vehicle, due to the fund-level leverage provided by the Small Business Administration ("SBA") with low interest rates. However, many potential general partners and investors have difficulty understanding the SBA's involvement in, and authority over, SBIC funds.
This seminar provided an overview of the Model Agreement of Limited Partnership, which the SBA requires to be used as the basis for forming an SBIC fund. Also, we identified common negotiation points in the Model Agreement that are requested by investors, and explain what additional requests the SBA will permit, and how general partners may accommodate those requests that are not permitted by the SBA. Finally, we discussed noteworthy provisions in the Model Agreement to remember when considering the formation of an SBIC fund.
Our panel included G. Thomas Stromberg (Partner) and Timothy Spangler (Partner), who was joined by Alan Roth (Partner) of Wildman, Harrold, Allen and Dixon.