Certified Capital Companies (CAPCOs)
Certified Capital Company (CAPCO) Program
The District’s Certified Capital Company (CAPCO) Program is an effort by the Government of the District of Columbia to increase private capital investment in small businesses based in the District. In 2004, the District provided 20 insurance companies with a total of $50 million in premium tax credits and in turn, the insurers provided $50 million to three approved CAPCOs. The CAPCOs are required to provide $50 million in loans and equity investments to District-based businesses. The three CAPCOs are managed by professional venture capitalists and operate independently of the District government.
It is important to distinguish the District’s CAPCO Program from a grant program. CAPCOs make investments, not grants, to qualifying businesses. 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.
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 be 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; be 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 or Wilshire DC Partners. Please email your contact information, business plan and response to the minimum qualifications to the following individuals for consideration. If your business plan is considered to be competitive for investment, you will be contacted.
Advantage Capital Partners
2445 M Street, NW, Suite 234
Washington, DC 20037
Enhanced Capital District Fund
2445 M Street, NW, Suite 310
Washington, DC 20037
Wilshire DC Partners
5039 Connecticut Avenue, NW, Building 3
Washington, DC 20008
For more information about the CAPCO program, select from the items below, or call DISB’s Risk Finance Bureau at (202) 727-8000.
- The Certified Capital Companies Improvement Amendment Act of 2010 [PDF]
- CAPCOs Rules [PDF]
- Qualified Business Application [PDF]
- CAPCO Act of 2003 [PDF]
- Bulletin 04-RFB-001 (Revised 9/22/04): Timing of the Use of Premium Tax Credits by Certified Investors [PDF]
- Tax Credit Transfer Affidavit
- Certified Investor Annual Notification of Credit Transfer [PDF]
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
Howard University Small Business Development Center
2600 6th Street, NW
Washington, DC 20059