IVCA Is Working to Help Our Members Through the COVID-19 Crisis

IVCA Is Working to Help Our Members Through the COVID-19 Crisis

April 1, 2020

Just an update on what IVCA has been doing to try to help our members through the COVID-19 disaster.
We’ve been in regular contact with our industry’s Federal Associations (NVCA, AIC & SBIA) and have assisted them, where possible, in their efforts to influence CARES Act drafting and implementation and with the Main Street Business Lending Program.

Most of us believe that the CARES Act is likely only Step 1 in Federal efforts to assist businesses and individuals suffering an unprecedented economic hardship that has no end in sight.  Our Federal Associations are in regular dialog with Senators and Congresspersons to share insights and concerns about the VC/PE corner of the economy so that they can develop programs that can assist the over 10 million employees in the US that work for VC/PE-backed companies.
 
In Illinois:
  • We’ve connected to Raja Krishnamoorthi ‘s Chief of Staff to NVCA.
  • We’ve reached out to Brad Schneider, who sits on the Small Business Committee with our concerns.
  • We understand that the SBA is hearing from a number of Senators and Congresspersons asking that the implementation reflect the intent to minimize jobs loss.
  • Some of our members have used their personal connections to Senators in other states including Small Business Chair, Sen. Marco Rubio, and have shared our concerns about VC/PE backed companies' exclusion from Federal assistance.  We are grateful for those efforts.
The CARES Act package includes 2 prospective sources of help for our members:
  • Paycheck Protection Program
  • Main Street Lending Program
  • Paycheck Protection Program (“PPP”), a new emergency loan program for domestic small businesses.
Are VC/PE-backed companies largely excluded?  Today, yes.  SBA is writing the rules for the program and they have 15 days (4/11/2020) to deliver the rules/process for accessing funds.
Many organizations, including AIC/NVCA/SBIC/ACA have been urging the SBA to allow companies to qualify based on number of employees <500 regardless of cap table (“Affiliation Rules”).  IVCA has joined in all of these efforts.  We are hoping to hear from the SBA by Wednesday of this week on the implementation rules and the process to follow to access funds.  We expect a more streamlined form than what exists today.
  • We await the rules on the $500 B Main Street Business Lending Program
IVCA is talking to DCEO about how the program might be rolled out and to let them know the issues VC-backed companies are facing with SBA.  They, too, are waiting to hear about the Main Street Program. I let them know that my intel is that the States’ will be allowed to develop programs and that a program based on the PPP for companies that don’t qualify for PPP would be super helpful to maintaining the Illinois startup ecosystem’s momentum.


I encourage you to reach out to your Federal Association(s) to thank them for the work they are doing on your behalf.  Their efforts are extraordinary.  Do not hesitate to share your concerns or questions about the CARES Act with us and with your Federal Association.  Please let us know if there are any additional ways IVCA can be helpful to you!