CAPCO Programs

Certified Capital Company (CAPCO) Programs were established to provide venture capital funds to new or expanding small businesses that are unable to access traditional financing.  CAPCO programs serve as an economic development tool used by states to create more high-paying jobs and stimulate economic growth.  As an alternative to conventional bank financing, a CAPCO program can provide a more flexible structure for growing businesses and accommodate a slightly higher risk profile.  These small businesses must meet certain criteria, which varies state to state, in order to be eligible to participate in CAPCO programs.

How CAPCO Programs Work – States are given access to large pools of capital otherwise unavailable to them through CAPCO programs, which offer state premium tax credits to insurance companies.  These insurance companies then provide a source of funding for venture capital investing through certified investment companies.  The investment companies in turn invest those funds into small local businesses that show growth potential.