Form 25-308 - Instructions For Application For Certification As A Certified Capital Company For Program Ii Page 2
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2Form 25-308 (Back)(Rev.1-12/4)
DEFINITIONS
As used in Item A.6, a CAPCO Affiliate means a CAPCO (certified in Texas or elsewhere):
(a) in close connection, aligned, or associated with the Texas CAPCO Applicant; or
(b) in which the Texas CAPCO Applicant has at least a 10% beneficial interest.
As used in Item A.7, an Affiliate Company means a legal entity that is in close connection, aligned, associated with, or
has at least a 10% beneficial interest in the Texas CAPCO Applicant.
Headquartered
A CAPCO will be considered “headquartered” in Texas if it meets, at a minimum, the following requirements with
respect to the Texas CAPCO Program:
(a) The CAPCO has a principal office in Texas in which the main investment and administrative functions of the
CAPCO are conducted;
(b) The original principal books and records of the CAPCO are maintained in the Texas office; and
(c) Not less than eighty percent (80%) of the CAPCO’s operational expenses (with certain exceptions) are spent
in Texas.
Plan of Operation
1.Mission Statement must state, at minimum, that the Applicant’s purpose is to encourage and assist in the creation,
development, and expansion of Texas qualified businesses, emphasizing viable small business enterprises which
traditionally have had difficulty in attracting institutional venture capital, and to expand employment opportunities
in Texas, thereby promoting the growth of the State’s economy.
2.Description of Business/Business Plan must describe the proposed CAPCO in detail and include, at minimum:
(a) a description of its organizational structure;
(b) an analysis of the areas and types of proposed qualified businesses to be invested in;
(c) location(s) of the CAPCO;
(d) a description of its management structure, including job descriptions and personnel composition and experience;
(e) long- and short-range plans and objectives which have been adopted by the CAPCO;
(f) a description of any (or copies of any written) business policies which have been established governing
accounting procedures, certified capital investments, loan and investment applications and the approval process,
and dividend policy;
(g) any financial statements, including anticipated/projected growth of qualified and non-qualified business
investments; and
(h) copies of any certified investor agreement forms.
3.Organizational Structure includes:
(a) an organizational chart listing all entities affiliated with the Applicant (i.e., parent, subsidiaries, and other
related interests); and
(b) a statement disclosing any existing or potential conflicts of interest between the Applicant, members, managers,
associates, or affiliates.
4.Service Providers and Responsibilities shall include, at minimum, a full description of the functions that the service
provider has been contracted for.
CERTIFICATION
The Applicant must adopt and certify the resolution contained in Attachment 6 of the Application as follows:
1. If Applicant is a corporation, the above resolution should be adopted by its board of directors and certified by its
President and Secretary.
2. If Applicant is a limited liability company, the resolution should be adopted by the members and certified by two
members. (If there is only one member the certification should be by the sole member.)
3. If the Applicant is a partnership, the resolution should be adopted by the partners (or general partners in the case
of a limited partnership) and certified by two partners or general partners, unless there is only one general partner
in which case it should be certified by the sole general partner. (If the general partner is not a person but is an
entity, the persons within the general partnership who would certify this document if the general partner itself was
the Applicant should certify.)
4. If the Applicant is a trust, the resolution should be adopted by the trustees and certified by two trustees, or if there
is only one trustee, by the sole trustee. (If the sole trustee is not a natural person, follow the same procedure
outlined above for partnerships.)
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