The National Venture Capital Association is backing a bill, passed by the House in September, that redefines the parameters of small businesses and thus their eligibility for grants and federal funding. Under the House version, ownership groups such as those associated with the NVCA would have more ability to go after federal funding programs via majority-owned small business affiliates. Currently, businesses owned primarily by VC firms are not classified as "Small" and thus are excluded from these contracts.
There is a Senate version of this legislation which leaves out the language entitling VC firms to "flood" the market for federal funding. Groups like the American Small Business League and the NFIB are opposed to the House version, but it seems the Senate version may pass, leaving it up to conference to decide the difference.
If it does clear the Senate, the conference committee will have to keep in mind that President Bush has voiced his opinion against the House version and would do well to curb the influence of the VC lobbyists in this process or face the veto pen in 2008.