Thread by @doug_rand

Key resources for small businesses & startups applying for #PPPloans:

First, here's everything that Treasury/SBA have published so far, including the Monday night FAQ on affiliation rules:

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home.treasury.gov/policy-issues/…

Second, here's a helpful memo from @nvca with step-by-step instructions on how #PPPloan applicants need to accommodate investors with a 20-49.999% stake & stay eligible for #PPP in the first place:

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nvca.org/wp-content/upl…

Third, here's a rundown of #PPPloan legal analyses from the ever-resourceful @EdGrapeNutZimm:

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https://twitter.com/EdGrapeNutZimm/status/1247537902294163456

TL;DR on #PPPloans for small businesses & startups:

*If you have a 50+% investor, there's no escaping affiliation, so your headcount + investor's headcount must be <500.

*If you have <50% investors who are willing to waive certain rights, you can escape affiliation.

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And importantly, the latest Treasury/SBA FAQ holds the lender harmless on these affiliation questions, which should make the process much smoother for #PPP applicants.

home.treasury.gov/system/files/1…

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Startups at Series A+ probably have a path forward, with multiple investors willing to waive unilateral rights.

But many seed-stage startups may have just one investor who (understandably) doesn't want to waive rights & risk misuse of capital.

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Let me know if you're seeing that unintended consequence of #PPP shutting out the youngest & most economically vulnerable startups.

cc @techstars @ycombinator @hackersfounders @ACAAngelCapital @astiaglobal @founding @MassChallenge @enginexyz @RiseOfRest

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Treasury/SBA should have put out a clear, bright-line affiliation rule to open up #PPPloans to all struggling small businesses, commensurate with the scale & urgency of the #COVID19 crisis.

But they only did so for large religious institutions.
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npr.org/sections/coron…