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Virginia will receive $230.4 million in federal aid to boost small businesses and entrepreneurs with loans and venture capital for tech startups, particularly those located in underserved communities.
The initiative is part of American Rescue Plan Actthat President Joe Biden signed early last year, to help small businesses recover from the COVID-19 pandemic and promote equitable investments in minority businesses that historically have had less access to financial capital to establish themselves.
“Virginia is for innovators — we see it every day,” said Sen. Tim Kaine, D-Va., who joined the White House announcement of federal aid to Virginia on Tuesday. .
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The announcement came six weeks after Kaine appeared with Treasury Secretary Janet Yellen – who is overseeing the new National Small Business Credit Initiative through the Treasury Department – at the Virginia Innovation Partnership Corp. in Herndon to tout federal investments in tech companies.
“We spent time talking with innovators from across the Commonwealth,” Kaine said.
The Richmond-based company, formerly known as the Center for Innovative Technology, and the Virginia Small Business Financing Authority will administer five new loan and venture capital programs under the federal initiative.
Gov. Glenn Youngkin, whose office was represented at the White House announcement, estimated that federal funds would attract 10 times the amount of private investment for every dollar spent under the program.
“Start-ups and small businesses are essential to our future and job creation,” Youngkin said in a statement Tuesday. “This initiative will expand our existing financing programs for businesses with strong potential for rapid growth and significant economic development. »
“We must have an economy that encourages innovation and entrepreneurship across the Commonwealth because new businesses create opportunities that uplift all Virginians,” he added.
Yellen, in a Treasury Department announcement Tuesday, called the initiative “a historic investment in entrepreneurship, small business growth and innovation through the American Rescue Plan that will help reduce barriers to ‘access to capital for traditionally underserved communities’.
The Treasury Department will provide $57 million for two loan programs and a loan guarantee program for Virginia small businesses. The largest portion of the initiative is $173.4 million to fund two new investment programs: one for early-stage and early-stage technology companies and one for venture capital firms that invest in entrepreneurs in Virginia’s underserved communities.
“We have a unique economic culture in this country that encourages innovation and risk-taking,” said Kaine, who remembers working at his father’s small steel company in Kansas.
Under this initiative, the National Small Business Financing Authority will provide loans and credit support, as well as technical assistance to small businesses. The authority employs four regional loan officers to work with small businesses to “help create and retain jobs,” grants officer Cheryl Bostick said during the White House Zoom call announcing the initiative .
The Youngkin administration said the technical assistance program would help businesses with 10 or fewer employees and those owned by “economically disadvantaged” Virginians, such as racial and ethnic minorities.
“These businesses often struggle to obtain the financing necessary to grow their businesses,” said Willis Morris, director of the Virginia Department of Small Business and Supplier Diversity. “We are committed to doing our best to provide the opportunities that very small startups need. »
The innovation partnership firm, now headquartered in Richmond but still operating in the iconic CIT building near Washington Dulles International Airport, already has a long track record of investing in technology startups and technology start-ups.
Designed 40 years ago by then-Gov. Chuck Robb and reorganized in 2020 under then-Gov. Ralph Northam, the company will use the money to match private investments in tech startups. The federal aid will also allow the company’s Virginia Venture Partners division to invest in funds established to provide venture capital to startups.
The funding will allow the company to “increase its support of the vibrant community of entrepreneurs that exists throughout Virginia,” said Barbara Boyan, dean of the Virginia Commonwealth University College of Engineering and chair of the Virginia Innovation Partnership Authority.
The company “is there at every stage of the commercialization process,” Boyan said, “from commercial validation to revenue generation, helping entrepreneurs build financially viable and stable businesses.”
Staying safe above freezing over the next few nights
