Certified Capital Companies (CAPCO) Program
The CAPCO Program was created by the Colorado Legislature with the goal of making venture capital funds available to new or expanding small businesses throughout Colorado.
The following questions and answers are provided for general information purposes. The CAPCO legislation and regulation provide specific program detail.
The CAPCO Program was created by the Colorado Legislature with the goal of making venture capital funds available to new or expanding small businesses throughout Colorado.
Why a CAPCO Program for Colorado?
The CAPCO Program is anticipated to create new employment opportunities within the state and to stimulate economic growth.
'CAPCO' means a Certified Capital Company. A CAPCO is a for-profit business organized to provide venture capital funds to 'qualifying' Colorado businesses. The application process to become a CAPCO is now closed.
How does the CAPCO Program work?
The State of Colorado provided $100 million for this program in the form of premium tax credits. The $100 million in premium tax credits were given to insurance companies in exchange for the insurance companies giving $100 million in cash to the CAPCOs. The CAPCOs then use these funds to invest in qualifying Colorado businesses.
Is the CAPCO Program still in operation?
The CAPCO program is still in operation. The Colorado legislature initially made $200 million in premium tax credits available for this program. However, the 2004 legislature redirected $100 million of the premium tax credits to other programs. The CAPCOs are currently investing the $100 million pool of cash received in April 2002, in Colorado businesses. Please contact the 6 CAPCOs to determine funding availability.
When will CAPCO money be available to Colorado businesses?
The CAPCOs are currently investing in qualifying Colorado businesses, and will continue to invest in qualifing Colorado businesses generally until all of the $100 million fund has been invested or until 2012, whichever comes first.
How can a Colorado business receive funding from a CAPCO?
There are certain minimum requirements that a Colorado business must meet in order to qualify for this program. These minimum requirements are contained in the legislation and regulation for this program. Except for these specific, minimum requirements, each CAPCO has complete flexibility in determining the types of investments it will consider. Colorado businesses should contact individual CAPCOs directly to determine if the business meets the minimum program requirements and if the business is one that the CAPCO would consider in general. Each CAPCO will independently provide application and approval information to businesses seeking funding. The list of CAPCOs is available on-line.
How does a Colorado business 'qualify' under this program?
At a minimum, the legislation and regulation for this program state that a business must generally meet ALL of the following conditions as of the time of a Certified Capital Company's first investment in the business to 'qualify':
a. the business must be unable to obtain bank financing for all or a portion of the funds that it needs;
b. if the business is located in a primarily rural area, the business must be unable to obtain all or a portion of the funds from the Business Loan Fund that serves the business's location;
Colorado businesses seeking funding should contact the CAPCOs directly for the CAPCO's determination of whether the business 'qualifies' under the state's minimum requirements and whether the business is one that the CAPCO is willing to consider. The list of CAPCOs is available on-line.
What is the maximum level of funding that a CAPCO can provide to a Colorado business? How long will it take?
The legislation for this program states that a CAPCO may invest up to 15% of the funds that it receives from insurance companies in any qualifying Colorado business. However, each CAPCO may set different maximum investment levels for individual businesses as long as it meets the 15% maximum restriction. Additionally, a CAPCO shall not own more than 49% of any one Qualified Business through the initial Qualified Investment in the business. Each CAPCO may establish varying review processes that result in a variety of processing times. Businesses seeking funding should contact the CAPCOs directly to determine each CAPCO's maximum level of funding and the timeframe. The list of CAPCOs is available on-line at.
Will the CAPCO Program help businesses located in rural parts of the state? WHhat defines a rural part of the state?
The legislature set-aside $25 million from the $100 million pool of funds for use in rural counties only. Additionally, the legislature provided an incentive for the CAPCOs to use funds from the $75 million statewide pool for businesses located in rural counties and in economically distressed urban communities.
The legislation has defined designated rural counties. The following do not qualify as designated rural counties for the purposes of this program: Adams, Arapahoe, Broomfield, Boulder, Denver, Douglas, Eagle, El Paso, Fremont, Garfield, Jefferson, Larimer, Summit, Teller, Weld. However, businesses in these counties are eligible to request funding from the $75 million statewide pool.
All other counties in the State qualify as designated rural counties under this program.
Will the CAPCO Program help businesses located in disressed urban communities within the state? What defines a distressed urban community?
The legislature provided an incentive for the CAPCOs to use funds from the $75 million statewide pool for businesses located in rural counties and in economically distressed urban communities. A distressed urban community for the purpose of this program is any area within the list of counties that is not a designated rural county (listed above) and that has been designated as an Enterprise Zone by the Colorado Economic Development Commission. Click here for a list of Local Enterpise Zones.
For further information, please contact:
John Reece or Alice Kotrlik
Business Finance Staff
1625 Broadway, Suite 2700
Denver, CO 80202
(T) 303-892-3840
(F) 303-892-3848
1 (800) 659-2656 TDD