SBA-backed investment funds
From the Deal [via Venture Reporter]:
In the tight fund-raising climate, the SBIC program has continued to draw a steady stream of applicants. But these days, half the applicants eager to tap its $7 billion pool are rejected, compared with only 10% a couple of years ago, according to estimates by SBIC funds' attorneys. This fiscal year, ending Sept. 30, the program expects to approve about 40 licensees, down from about 80 last year, and 60 in 2000.
After reaping more than $500 million in cumulative profits since 1994, the program's success has been tempered by funds lacking the resources for follow-on investments, leaving struggling portfolio companies to wither on the vine.
...An SBIC, which stands for Small Business Investment Companies, is a privately owned and operated investment fund licensed by the SBA. The license makes it eligible to receive $2 for every $1 raised.