Venture Firms Say We Didn’t Seek Bailouts Despite What Data Show
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Representatives of several venture capital firms that were listed as small-business bailout recipients in federal data Monday say they didn’t apply for the program or get any of its funding.
Andreessen Horowitz, Index Ventures, Foundation Capital and Advent Capital Management are among the firms saying they didn’t seek Paycheck Protection Program loans, despite data released Monday showing they were approved among almost 4.9 million loans totaling $521.5 billion.
In at least one case, Andreessen Horowitz’s, the loan in question — for between $350,000 and $1 million — went to a portfolio company for which Andreessen is the beneficial owner, according to a spokeswoman for the bank that handled the loan application. Other firms said they looked into applying for the aid, but didn’t follow through.
The Small Business Administration, which administered the loan program with the Treasury Department, on Monday reported data from applications that were entered into its electronic transmission system by an approved lender, according to a senior administration official. If a lender didn’t cancel the loan in the system, it was listed as part of Monday’s data disclosure, the official said.
The PPP, as the program is known, was designed to help small businesses keep employees on their payrolls during the economic downturn created by the coronavirus pandemic. After several comparatively large entities got funding during the PPP’s initial rollout, the Trump administration warned companies that had access to other sources of capital that they likely didn’t qualify for PPP loans. The administration also said that all loans of more than $2 million would be reviewed.
An Andreessen Horowitz spokeswoman, Margit Wennmachers, said Monday that the firm didn’t apply for or receive any funds and called its listing in the disclosures a “mystery.”
Silicon Valley Bank spokesperson Julia Thompson confirmed that Andreessen Horowitz did not apply, but said a PPP loan was approved for one of its portfolio companies. The Andreessen firm was incorrectly inputted as the borrower rather than as a beneficial owner of the actual borrower, and the error has been corrected with the SBA, Thompson said.
Index Ventures, another venture capital firm, is listed in the data as being approved for a loan of between $2 million and $5 million, though it “did not apply for a PPP loan at any point,” said spokeswoman Ana Andreescu.
Foundation Capital is shown as having been approved for a loan of between $1 million and $2 million, but spokesperson Sang Ngo said the firm did not apply for a loan or take one. Ngo said the firm is trying to “sort out the error and get it corrected” and suspects it was a hand-key error by the bank processing the loan.
On Wall Street, Advent Capital Management, an $8.5 billion firm run by money manager Tracy Maitland, was listed as being approved on April 15 for a PPP loan of between $1 million and $2 million, according to the government data. But Darius Athill, a spokesperson for the New York-based firm, said “Advent Capital Management explored but never completed an application, and as such, did not receive any pandemic aid.”
Weiss Multi-Strategy Advisers said it looked into applying for a PPP loan at a very early stage, when guidelines around eligibility were still being assessed and amid internal deliberations. The New York-based investment management firm said it rescinded its incomplete application and didn’t receive any money but was still listed as being approved for a loan between $2 million and $5 million.
Bird Rides Inc., a venture-backed scooter rental service, was also listed. Travis VanderZanden, the chief executive officer, said the firm consulted with Citigroup Inc. and decided not to apply because “the money was more deserved by small and local businesses.” VanderZanden said on Twitter it appears Citigroup started an application while it waited for the company’s decision about whether to apply.
“Citi has not funded a PPP loan for Bird,” said Danielle Romero-Apsilos, a spokesperson for the bank. “Citi will seek the assistance of the SBA to ensure that the agency’s data accurately reflects actual PPP lending.”
— With assistance by Joshua Brustein, Saijel Kishan, Hema Parmar, and Hannah Levitt
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