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Certified Capital Companies (CAPCOs)
About the DC Certified Capital Company (CAPCO) Program
The DC Certified Capital Company (CAPCO) Program is an effort by the District of Columbia to increase private capital investment in the city’s new or expanding small businesses.
Through the DC CAPCO program, insurance companies receive a DC tax credit against their premium taxes in exchange for making $50 million available to the three CAPCOs in the form of long-term equity and debt for new or expanding small businesses based in the District. The three DC CAPCO funds, which are called “CAPCOs,” are managed by professional venture capitalists, stimulate the creation of high-wage jobs and provide an incentive to retain, expand, and attract business to DC.
It is important to distinguish the DC CAPCO Program from a grant program; CAPCOs make investments, not grants, into qualifying businesses. As such, the DC CAPCO Program is not well-suited to every business that meets the minimum qualifications listed below. It is also important to understand that the CAPCOs decide which businesses to fund, based on criteria established by each CAPCO. Additionally, the CAPCO law that created the program does not establish the terms of the funding. Instead, business owners and the CAPCOs must negotiate all terms. And finally, the CAPCO law does not authorize the District government to be involved in any aspect of the funding decisions, other than ensuring that the businesses that receive funding meet the minimum qualifications listed below.
The CAPCO model combines private-sector expertise in identifying, evaluating, and financing businesses with the public sector's interest in a stronger local economy. The CAPCOs consider investments in a wide range of small businesses, including, but not limited to, the following:
- Distribution channels
- Manufacturing centers
- Retail outlets
- Service companies
- Technology companies
- Transportation providers
DC CAPCO Program Minimum Qualifications
In addition to having a product or service with strong commercial potential, a sound business strategy, and capable management, businesses interested in applying for an investment via the DC CAPCO Program must meet the following requirements:
- The business has its headquarters and principal operations in the District of Columbia;
- At least 25 percent of the business’s employees must be District residents;
- At least 75 percent of the business’s employees must work in the District;
- The business must qualify as a “small business concern” as defined by the US Small Business Administration's requirements for SBA loan applicants;
- The business must certify that it has attempted and failed to obtain conventional financing;
- The business was not organized by a certified capital company or an affiliate of a CAPCO;
- The business does not have an ownership or investment or other financial relationship with a CAPCO or an affiliate of a CAPCO before the date the CAPCO makes an initial investment in the business; and
- The business cannot be engaged in professional services provided by accountants, lawyers or physicians; engaged in real estate development, or insurance; or be a regional or national franchise.
Consideration of Applications for CAPCO Investment
The CAPCOs identify, evaluate, and finance the most competitive businesses that meet the minimum qualifications listed above. If a business meets the program’s minimum qualifications, its business plan can then be considered by the CAPCOs as an investment opportunity. It is important to note that meeting the program’s minimum qualifications is not a guarantee that the CAPCOs will be able to make investments into that business. Many business plans from minimally qualifying businesses are submitted to the CAPCOs for consideration and only the most commercially competitive are able to secure investment capital.
If you have a business that meets the minimal qualifications for the DC CAPCO Program, and if you have a business plan ready for consideration as well as the necessary financial records (such as tax returns from the last two years, payroll records, and personal financial statement), please contact Advantage Capital Partners, Enhanced Capital District Fund, and Wilshire DC Partners. Please email your contact information, business plan, and response to the minimum qualifications to the following individuals for consideration:
Wilshire DC Partners
Matthew Ash
5039 Connecticut Avenue, NW, Building 3
If your business plan is considered to be competitive for investment from a CAPCO, you will be contacted by Advantage Capital Partners, Enhanced Capital District Fund, and/or Wilshire DC Partners.
For more information about the CAPCO program, select from the items below, or call DISB’s Risk Finance Bureau at (202) 727-8000.
Additional Resources
If you are interested in the CAPCO program, but need assistance developing your business plan and financial statements, you should contact one or more of the following organizations to assist you with these needs.
The District of Columbia Chamber of Commerce Foundation
506 9th Street, NW, Washington, DC 20004
Phone: (202) 624-0606
Fax: (202) 638-6762 www.dcchamber.org
Howard University Small Business Development Center
2600 6th Street, NW Washington, DC 20059 (202) 806-1550 dssbdc.org
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