State Small Business Credit Initiative (SSBCI) Insider Guidance
The Department of Treasury (Treasury) prohibits funding provided through the State Small Business Credit Initiative (SSBCI) program to be invested in or loaned into a company in which an SSBCI Insider (as defined below) has a personal financial interest. Certain MTC investments are funded through the SSBCI program and, therefore, MTC requires applicants to certify whether the applicant has knowledge of an SSBCI Insider’s investment in, or relationship to, the applicant.
An SSBCI Insider having personal financial interests in an applicant organization will not negatively impact an applicant organizations eligibility to be considered for or awarded economic assistance that may be provided by MTC under a program other than SSBCI. MTC administers an alternative pool of capital to provide economic assistance to the state’s most promising early-stage businesses where SSBCI Insiders have a personal financial interest. In all cases, MTC’s Conflict of Interest Policy applies to all potential relationships between applicants and MTC affiliates.
SSBCI Insiders include any individuals that have direct oversight over the MTC’s SSBCI-funded programs. These individuals include members of MTC’s Board of Directors, MTC staff members and their family members and business partners. Treasury applies the following definitions for such terms:
1. An “SSBCI Insider” is a person who, in the 12 months preceding the transaction in which SSBCI funds are deployed:
(a) was: (i) a manager or staff member, whether by employment or contract, in the state’s SSBCI venture capital program; (ii) a government official with direct oversight or jurisdiction over an SSBCI venture capital program, or such an official’s immediate supervisor; (iii) a member of the board of directors or similar body for a state-sponsored non-profit entity who, through such membership, has authority to vote on decisions to invest SSBCI Funds or has authority over the employment or compensation of staff managing processes related to the investment of SSBCI Funds; (iv) a member of the board of directors or similar body for an independent non-profit or for-profit entity that operates an SSBCI venture capital program; or (v) an employee, volunteer, or contractor on an investment committee or similar body that recommends or approves SSBCI investments under the SSBCI venture capital program; or
(b) exercised a controlling influence on state decisions regarding: (i) the allocation of SSBCI Funds among approved state venture capital programs; (ii) eligibility criteria for the state’s SSBCI venture capital programs; or (iii) the processes for approving investments of SSBCI Funds under the state’s SSBCI venture capital program.
2. A “family member” of an SSBCI Insider includes such person’s spouse, domestic partner, parents, grandparents, children, grandchildren, brothers, sisters, stepbrothers, stepsisters, and other relatives who live in the same household as the SSBCI Insider.
3. A “business partner” of an SSBCI Insider is someone who owns 10% or more of any class of equity interest, on a fully diluted basis, in any private entity in which an SSBCI Insider also owns 10% or more or any class of equity interest on a fully diluted basis.
4. “Personal financial interest” means any financial interest derived from ownership or right to ownership of, or lending to or other investment in an entity that is likely to apply and receive SSBCI Funds as determined by the Organization. Notwithstanding any provision of this Supplement to the contrary, a Personal Financial Interest does not include any bona fide compensation arrangement with such an entity, including but not limited to, compensation in connection with services provided, licensing agreements, or royalty agreements.
A full list of members of MTC’s Board of Directors and MTC staff (and, where applicable, their principal affiliations) links below:
For additional information on the SSBCI program please visit Treasury’s dedicated website.
MTC’s Conflict of Interest Policy (as amended on October 13, 2022) and the SSBCI-specific Supplement (adopted October 13, 2022) are available to review using the following links.
Contact for Questions
Please email Jack Scatizzi.