The initiative of Certified Capital Company, also known as CAPCO programs, aim to boost venture capital, thereby boosting Washington, D.C.’s small businesses. The primary purpose of the program is to increase private capital investment in small businesses located in the District of Columbia. According to the Department of Insurance, Securities & Banking, the Government of District of Columbia fulfilled premium tax credits obligations to 20 insurance companies in the amount of $50 million, in 2004. The insurance companies invested venture capital in three CAPCOs in the amount of $50 million. The invested capital is for the CAPCOs to provide loans and equity to small businesses in District of Columbia and companies seeking to relocate to the area.
There are advantages for participating in the D.C. CAPCO program, including promoting economic development growth in the state and creating job opportunities. The program doesn’t offer grants, but instead investments to small businesses that meet certain criteria and requirements. Small companies are eligible to apply for funds if they have a solid product or service with marketing potentials, strategic business plans and management proficiencies. Some of CAPCOs requirements to make the decision of selecting qualified businesses are the following: company must be headquartered & operates in D.C.; company’s employees must be employed in D.C. at 25%; and company is not affiliated with CAPCO. Professional businesses, such as accountants, attorneys, doctors, insurance, franchises, and real estate aren’t allowed to participate in the program.
Out of all the applications submitted for review to the CAPCOs, the most competitive and marketable companies are selected that meet the qualification requirements of the program. When the final decision is made, the company’s plan is considered for potential investment funding. Companies chosen for venture investment capital may be a start-up, expansion of an established business, or a business in its first phase. The businesses become portfolio companies after receiving the funds.
The CAPCO program in D.C. is responsible for boosting venture capital by offering tax credits to insurance companies. The CAPCOs received $50 million in 2014 from insurance companies to offer to small businesses in the District of …