St. Cloud Capital Continues to Support Small Businesses through its Investing Activities

Managing Partner, Kacy Rozelle, Attends Small Business Administration Conference

December 12th, 2019

On December 11th, 2019, Kacy Rozelle, Managing Partner at St.  Cloud Capital, LLC, attended the Investing in Nevada Working with SBA Small Business Investment Companies (SBICs) conference in Las Vegas, NV. This conference was hosted by the Nevada Office of the U.S. Small Business Administration (SBA). The SBA holds SBIC program workshops to educate prospective SBIC applicants and investors on opportunities to form an SBIC or invest in SBICs who, in turn, provide capital to U.S. small businesses. The workshop featured an interactive discussion with representatives from SBA’s Office of Investment and Innovation regarding the SBIC program, SBIC managers, bank, family and institutional investors, federal regulators, and small businesses receiving SBIC capital. The conference offered new insights and exceptional networking opportunities for Mr. Rozelle on behalf of St. Cloud Capital.

Mr. Rozelle was invited to participate in the program by Joseph Amato, the Director of the Nevada District of the Office of the U.S. Small Business Administration. Mr. Rozelle joined a panel  discussion alongside Mr. Amato and his colleagues: Joe Shepard, the SBA’s Associate Administrator, and Sam Boyd, the SBA’s Chief Investment Officer and Director of Program Development. Mr. Rozelle spoke about the benefits of the SBIC program and noted that “managing a fund and providing growth capital to the nation’s small businesses has great benefits.” According to Mr. Rozelle, licensing requirements were discussed including the application process, the diligence performed by the SBA, prerequisite investment management experience, legal documentation by fund counsel, fundraising, and capital deployment once licensed.  Limited partners in attendance, including representatives of Wells Fargo Bank and the Bank of Nevada, also offered insights from their perspectives.

SBIC funds offer incentives to both the limited partners (LPs) and the small business owners in the United States. “In 2010 alone, SBICs facilitated the investment of $2.05 billion in small businesses, helping grow our economy and create jobs,” says U.S. Senator Bob Casey, of  Pennsylvania. SBICs invest in small businesses that range in size from $1 million to $100 million in annual revenues. In the 2018 SBA report, SBIC invested $5.5 billion in 1,151 small businesses and created and sustained an estimated 106,021 jobs. The U.S. Department of the Treasury reports that SBIC investments are attractive to LPs, especially banks, since they “generate favorable financial returns, develop their small-business portfolios, and potentially earn Community Reinvestment Act (CRA) consideration.” In addition, the rigorous SBIC licensing process, which can take 12 to 26 months, provides credibility to the funds.

For Mr. Rozelle, “the SBA’s presentation inspired a free-flowing conversation, and a lot of useful information was provided to all in attendance.” In addition, “the conference was opportunistic in that there are currently no licensed SBICs that are based in the State of Nevada, and St. Cloud was able to offer insights and experiences based on our 18 years in the SBIC program across two licensed funds,” said Mr. Rozelle.  St. Cloud is in the early stages of planning its next investment fund, which the company expects to take through the SBIC licensing process.