Equity Financing Alternatives for Small Business: A Review of Best Practices in the United States

2. Objectives of Report

The objective of this report is to review best practices in the US related to equity financing for SMEs. This review has been prepared in order to assist Industry Canada in developing public policy regarding small business financing. While the goal of such policy will be to increase access to risk capital for SMEs in the Canadian setting, the following report will detail initiatives in the United States. It is hoped that by analyzing some of these policies and procedures, the Canadian government will gain valuable knowledge in order to continue to proactively improve the flow of equity financing to SMEs in this country.

The report has the following objectives:

• To identify and describe US initiatives that enhance or facilitate the flow of equity financing to small business. This includes:
  • Government programs
  • Tax incentives
  • Network infrastructure
  • Financing community initiatives
  • Investment clubs and networks
• Identify linkages between the various groups and their delivery vehicles
• Summarize recent empirical and theoretical analyses on access to equity financing for start-ups and early stage SMEs.