The mystery of venture capital’s PPP funding

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The Trump administration released the list of companies that had received loans aimed at small businesses on Monday—and eyebrows raised when the names of prominent venture capital firms were cited among the recipients.

According to the SBA data, Index Ventures and Foundation Capital had each received between $5 million to $10 million from the Paycheck Protection Program.

Except both firms say they did not receive, nor did they apply for, the funding.

Instead, the funding went to a portfolio company in both cases. It “was a portfolio company where we are an investor,” wrote Foundation Capital General Partner Charles Moldow via email, without naming the company. Silicon Valley Bank, which administered the loan, says it is in the process of clearing the issue up with the SBA. Similarly, Index Ventures says it had not applied for a PPP loan “at any point,” with the lender in question, Radius Bank, telling CNBC that it was portfolio company, Pilot.com, that had received the loan. Clerical errors eventually led to Index’s name showing up in the SBA rundown, says Radius.

Scooter startup Bird was also listed as a recipient of PPP funding, but the company refuted the data. “Bird spoke with Citi early on, but decided not to apply for PPP because the money was more deserved by small and local businesses,” Bird founder Travis VanderZanden wrote in a tweet. “It looks like Citi started an application while they waited for our decision on whether to formally apply.” My colleague, Jen Wieczner, confirmed the account with Citi, which dealt with Bird’s application.

At the same time, other startups that the SBA report says received funding, say that information is accurate. Getaround, a unicorn that helps consumers share their cars and has raised from SoftBank, confirmed that it received between $5 million to $10 million in funding. Tradeshift, a fintech unicorn backed by Goldman Sachs, also received between $5 million to $10 million from the SBA, a point that a spokesperson did not refute.

So the data is not trash—it’s just really, truly messy and should be taken with a grain of salt. Not only are there chances for error from multiple stages of the process (applicant, bank, SBA), there’s also the big F-word: fraud, which is inevitable given that over 650,000 companies took out loans of over $150,000.

Finally: Palantir Technologies, yes that one, has filed confidentially for an IPO. Among the oldest of the unicorns, the company founded in 2004 by Peter Thiel has at last made a move toward the public market. While much hyped, the company has repeatedly missed profitability targets. Now the company appears to be heavily weighing a direct listing, per the Wall Street Journal. Read more.

Lucinda Shen
Twitter: @shenlucinda
Email: [email protected]