Are VC-backed startups excluded from federal aid? KC Tech Council urges SBA rethink rules

Editor’s note: The following is part of Startland News’ ongoing coverage of the impact of Coronavirus (COVID-19) on Kansas City’s entrepreneur community, as well as how innovation is helping to drive a new normal in the ecosystem. Click here to follow related stories as they develop.

Legislation signed into law last week to provide broad assistance across all sectors of the economy falls short of protecting venture capital-backed startups and companies in Kansas City, said Ryan Weber. The loan program under the Coronavirus Aid, Relief, and Economic Security (CARES) Act appears to specify that companies with equity investors are ineligible from receiving relief through the U.S. Small Business Administration (SBA) effort, said Weber, KC Tech Council president. “At this time of uncertainty, there are no good reasons why VC-funded startups should be excluded from receiving federal aid,” he said. “If one thing is certain — startups create jobs. In 2019, startups created nearly three million jobs in the U.S. Without access to federal relief aid, it would be fair to assume there would be a dramatic decrease in jobs created by startups this year.” […]

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