D.C. Mun. Regs. tit. 26, r. 26-C2921

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 26-C2921 - INNOVATION FINANCE COMPANY - INNOVATION FINANCE PROGRAM

2921.1

An Innovation Finance Company shall demonstrate to the Commissioner that it has a track record of positive return on investment and be an entity in one of the following categories:

(a) Certified by the U.S. Department of the Treasury's CDFI Fund as a Community Development Financial Institution;

(b) Registered as a Business Development Company, as defined under the Investment Company Act of 1940;

(c) Certified by the U.S. Small Business Administration as a Small Business Investment Company (SBIC), New Market Venture Capital Company, or Rural Business Investment Company; or

(d) Any other entity that has at least five million dollars ($5,000,000) of assets under management or an Accredited Investor within the meaning of the Federal Securities laws, both of which must demonstrate to the Commissioner that it has qualified management and staff.

2921.2

An Innovation Finance Company may also include Angel Investor Networks, which shall be defined as:

(1) a group of investors where all members meet all requirements as "Accredited Investors" within the meaning of the Federal securities laws; and

(2) a group of investors that has been operating as a group for a minimum of five (5) years and has made cumulative yearly investments as a network of no less than five hundred thousand dollars ($500,000) per year and average investment of no less than one hundred twenty-five thousand dollars ($125,000) per investee company. All members of the Angel Investor Networks shall meet the certification requirements of the SSBCI program, including but not limited to the Sex Offender Certifications.

2921.3

An Innovation Finance Company shall enroll in the Innovation Finance Program by providing to DISB:

(a) An application for enrollment;

(b) A signed Innovation Finance Program Participation Agreement with DISB which, after DISB's execution, may be used by the Innovation Finance Company for subsequent investments in subsequent Eligible Recipients provided that (1) DISB has not amended or otherwise revised the form of Participation Agreement and (2) the Innovation Finance Company has been re-certified as set forth in § 2921.2;

(c) A certification that it is in compliance with the requirements of the District of Columbia and federal securities laws;

(d) A certification that, consistent with OMB Circular A-129, it has or will have at the time DISB makes any investment, at least twenty percent (20%) of its own capital at risk in any investment enrolled in the Innovation Finance Program, unless a waiver is granted;

(e) A certification that no principal of the Innovation Finance Company has been convicted of a sex offense against a minor as the term is defined in Section 111 of the Sex Offender Registration and Notification Act ( 42 U.S.C. § 16911);

(f) A certification in the form to be provided to the Innovation Finance Company by DISB providing that the Innovation Finance Company has complied with the Conflicts of Interests for Venture Capital Programs set forth in the current SSBCI National Standards;

(g) A certification from the proposed Eligible Recipient in the form to be provided by DISB regarding certification of the Use of Proceeds and that the proceeds are for a permitted Business Purpose within the meaning of the SSBCI Guidelines and the Small Business Jobs Act of 2010 (the "Act");

(h) A certification from the proposed Eligible Recipient in the form to be provided by DISB regarding the SSBCI Sex Offender Rules and the Act; and

(i) Any other document DISB determines is necessary for the administration of the District SSBCI Programs or for compliance with the U.S. Department of the Treasury's SSBCI.

2921.4

Once enrolled and certified as an Innovation Finance Company, the Company may present subsequent Eligible Recipients to the Innovation Finance Company using the following procedure:

(a) The Innovation Finance Company shall re-certify it meets the requirements in § 2921.1; and

(b) The Innovation Finance Company and the Eligible Recipient as the case may be, shall each submit the relevant Certifications set forth in §§ 2921.3(a) - (i).

D.C. Mun. Regs. tit. 26, r. 26-C2921

As amended by Final Rulemaking published at 61 DCR 9181 (September 5, 2014); amended by Final Rulemaking published at 63 DCR 11535 (9/16/2016)