---
kind: "section"
citation: "15 U.S.C. § 689c"
title: "15"
title_heading: "Commerce and Trade"
number: "689c"
heading: "Selection of New Markets Venture Capital companies"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/689c"
units:
  - "Chapter 14B — Small Business Investment Program"
  - "Subchapter III — Investment Division Programs"
  - "Part B — New Markets Venture Capital Program"
---

# §689c. Selection of New Markets Venture Capital companies

- (a) **Eligibility—** A [company](/usc/15/662.md?p=3) shall be eligible to apply to participate, as a [New Markets Venture Capital company](/usc/15/689.md?p=4), in the program established under this part if—
  - (1) the [company](/usc/15/662.md?p=3) is a newly formed for-profit entity or a newly formed for-profit subsidiary of an existing entity;
  - (2) the [company](/usc/15/662.md?p=3) has a management team with experience in community development financing or relevant [venture capital](/usc/15/690.md?p=6) financing; and
  - (3) the [company](/usc/15/662.md?p=3) has a primary objective of economic development of [low-income geographic areas](/usc/15/689.md?p=3).
- (b) **Application—** To participate, as a [New Markets Venture Capital company](/usc/15/689.md?p=4), in the program established under this part a [company](/usc/15/662.md?p=3) meeting the eligibility requirements set forth in [subsection (a)](#a) shall submit an application to the [Administrator](/usc/15/662.md?p=2) that includes—
  - (1) a business plan describing how the [company](/usc/15/662.md?p=3) intends to make successful [developmental venture capital](/usc/15/689.md?p=1) investments in identified [low-income geographic areas](/usc/15/689.md?p=3);
  - (2) information regarding the community development finance or relevant [venture capital](/usc/15/690.md?p=6) qualifications and general reputation of the [company](/usc/15/662.md?p=3)’s management;
  - (3) a description of how the [company](/usc/15/662.md?p=3) intends to work with community organizations and to seek to address the unmet capital needs of the communities served;
  - (4) a proposal describing how the [company](/usc/15/662.md?p=3) intends to use the grant funds provided under this part to provide [operational assistance](/usc/15/689.md?p=5) to [smaller enterprises](/usc/15/662.md?p=12) financed by the [company](/usc/15/662.md?p=3), including information regarding whether the [company](/usc/15/662.md?p=3) intends to use licensed professionals, when necessary, on the [company](/usc/15/662.md?p=3)’s staff or from an outside entity;
  - (5) with respect to binding commitments to be made to the [company](/usc/15/662.md?p=3) under this part, an estimate of the ratio of cash to in-kind contributions;
  - (6) a description of the criteria to be used to evaluate whether and to what extent the [company](/usc/15/662.md?p=3) meets the objectives of the program established under this part;
  - (7) information regarding the management and financial strength of any parent firm, affiliated firm, or any other firm essential to the success of the [company](/usc/15/662.md?p=3)’s business plan; and
  - (8) such other information as the [Administrator](/usc/15/662.md?p=2) may require.
- (c) **Conditional approval—**
  - (1) **In general—** From among [companies](/usc/15/662.md?p=3) submitting applications under [subsection (b)](#b), the [Administrator](/usc/15/662.md?p=2) shall, in accordance with this subsection, conditionally approval[^1] [companies](/usc/15/662.md?p=3) to participate in the New Markets [Venture Capital](/usc/15/690.md?p=6) Program.
  - (2) **Selection criteria—** In selecting [companies](/usc/15/662.md?p=3) under [paragraph (1)](#c-1), the [Administrator](/usc/15/662.md?p=2) shall consider the following:
    - (A) The likelihood that the [company](/usc/15/662.md?p=3) will meet the goal of its business plan.
    - (B) The experience and background of the [company](/usc/15/662.md?p=3)’s management team.
    - (C) The need for [developmental venture capital](/usc/15/689.md?p=1) investments in the geographic areas in which the [company](/usc/15/662.md?p=3) intends to invest.
    - (D) The extent to which the [company](/usc/15/662.md?p=3) will concentrate its activities on serving the geographic areas in which it intends to invest.
    - (E) The likelihood that the [company](/usc/15/662.md?p=3) will be able to satisfy the conditions under [subsection (d)](#d).
    - (F) The extent to which the activities proposed by the [company](/usc/15/662.md?p=3) will expand economic opportunities in the geographic areas in which the [company](/usc/15/662.md?p=3) intends to invest.
    - (G) The strength of the [company](/usc/15/662.md?p=3)’s proposal to provide [operational assistance](/usc/15/689.md?p=5) under this part as the proposal relates to the ability of the [applicant](/usc/15/7a.md?p=3) to meet applicable cash requirements and properly utilize in-kind contributions, including the use of resources for the services of licensed professionals, when necessary, whether provided by [persons](/usc/15/7a.md?p=6) on the [company](/usc/15/662.md?p=3)’s staff or by [persons](/usc/15/7a.md?p=6) outside of the [company](/usc/15/662.md?p=3).
    - (H) Any other factors deemed appropriate by the [Administrator](/usc/15/662.md?p=2).
  - (3) **Nationwide distribution—** The [Administrator](/usc/15/662.md?p=2) shall select [companies](/usc/15/662.md?p=3) under [paragraph (1)](#c-1) in such a way that promotes investment nationwide.
- (d) **Requirements to be met for final approval—** The [Administrator](/usc/15/662.md?p=2) shall grant each conditionally approved [company](/usc/15/662.md?p=3) a period of time, not to exceed 2 years, to satisfy the following requirements:
  - (1) **Capital requirement—** Each conditionally approved [company](/usc/15/662.md?p=3) shall raise not less than $5,000,000 of [private capital](/usc/15/662.md?p=9) or binding capital commitments from one or more investors (other than agencies or departments of the Federal Government) who met criteria established by the [Administrator](/usc/15/662.md?p=2).
  - (2) **Nonadministration resources for operational assistance—**
    - (A) **In general—** In order to provide [operational assistance](/usc/15/689.md?p=5) to [smaller enterprises](/usc/15/662.md?p=12) expected to be financed by the [company](/usc/15/662.md?p=3), each conditionally approved [company](/usc/15/662.md?p=3)—
      - (i) shall have binding commitments (for contribution in cash or in kind)—
        - (I) from any sources other than the Small Business [Administration](/usc/15/662.md?p=1) that meet criteria established by the [Administrator](/usc/15/662.md?p=2);
        - (II) payable or available over a multiyear period acceptable to the [Administrator](/usc/15/662.md?p=2) (not to exceed 10 years); and
        - (III) in an amount not less than 30 percent of the total amount of capital and commitments raised under [paragraph (1)](#d-1);
      - (ii) shall have purchased an annuity—
        - (I) from an insurance [company](/usc/15/662.md?p=3) acceptable to the [Administrator](/usc/15/662.md?p=2);
        - (II) using funds (other than the funds raised under [paragraph (1)](#d-1)), from any source other than the [Administrator](/usc/15/662.md?p=2); and
        - (III) that yields cash payments over a multiyear period acceptable to the [Administrator](/usc/15/662.md?p=2) (not to exceed 10 years) in an amount not less than 30 percent of the total amount of capital and commitments raised under [paragraph (1)](#d-1); or
      - (iii) shall have binding commitments (for contributions in cash or in kind) of the type described in [clause (i)](#d-2-A-i) and shall have purchased an annuity of the type described in [clause (ii)](#d-2-A-ii), which in the aggregate make available, over a multiyear period acceptable to the [Administrator](/usc/15/662.md?p=2) (not to exceed 10 years), an amount not less than 30 percent of the total amount of capital and commitments raised under [paragraph (1)](#d-1).
    - (B) **Exception—** The [Administrator](/usc/15/662.md?p=2) may, in the discretion of the [Administrator](/usc/15/662.md?p=2) and based upon a showing of special circumstances and good cause, consider an [applicant](/usc/15/7a.md?p=3) to have satisfied the requirements of [subparagraph (A)](#d-2-A) if the [applicant](/usc/15/7a.md?p=3) has—
      - (i) a viable plan that reasonably projects the capacity of the [applicant](/usc/15/7a.md?p=3) to raise the amount (in cash or in-kind) required under [subparagraph (A)](#d-2-A); and
      - (ii) binding commitments in an amount equal to not less than 20 percent of the total amount required under paragraph (A).
    - (C) **Limitation—** In order to comply with the requirements of subparagraphs [(A)](#d-2-A) and [(B)](#d-2-B), the total amount of a [company](/usc/15/662.md?p=3)’s in-kind contributions may not exceed 50 percent of the [company](/usc/15/662.md?p=3)’s total contributions.
- (e) **Final approval; designation—** The [Administrator](/usc/15/662.md?p=2) shall, with respect to each [applicant](/usc/15/7a.md?p=3) conditionally approved to operate as a [New Markets Venture Capital company](/usc/15/689.md?p=4) under [subsection (c)](#c), either—
  - (1) grant final approval to the [applicant](/usc/15/7a.md?p=3) to operate as a [New Markets Venture Capital company](/usc/15/689.md?p=4) under this part and designate the [applicant](/usc/15/7a.md?p=3) as such a [company](/usc/15/662.md?p=3), if the [applicant](/usc/15/7a.md?p=3)—
    - (A) satisfies the requirements of [subsection (d)](#d) on or before the expiration of the time period described in that subsection; and
    - (B) enters into a [participation agreement](/usc/15/689.md?p=6) with the [Administrator](/usc/15/662.md?p=2); or
  - (2) if the [applicant](/usc/15/7a.md?p=3) fails to satisfy the requirements of [subsection (d)](#d) on or before the expiration of the time period described in that subsection, revoke the conditional approval granted under that subsection.

## Footnotes

[^1]: So in original. Probably should be “approve”.

## Source credit

(Pub. L. 85–699, title III, § 354, as added Pub. L. 106–554, § 1(a)(8) [§ 1(b)(3)], Dec. 21, 2000, 114 Stat. 2763, 2763A–655.)