District of Columbia SSBCI venture capital, a fund of funds run by K Street Capital

Two agencies, and only one of them runs the venture route

The District operates three SSBCI financing programs: a collateral support program, a loan participation program, and an equity and venture capital program. The Department of Insurance, Securities and Banking is the implementing entity and administers both lending programs. It engaged the Office of the Deputy Mayor for Planning and Economic Development to administer the venture capital program.

Treasury's portfolio table puts the collateral support program at $15.0 million, the loan participation program at $21.0 million, and the venture capital program at $26.0 million, for a total District allocation of $62.0 million. K Street Capital describes the same arithmetic from the other direction, stating that the District received $62 million and that DMPED applied to amend its allocation agreement so that $26 million of the total could be deployed as a venture capital program.

DMPED selected K Street Capital through a competitive process to act as Program Administrator for the fund of funds. K Street Capital sources and contracts with fund managers, manages them, measures deployment, and reports to Treasury, while DMPED provides oversight of that administration.

The match is a fund-level test with published arithmetic

A fund manager seeking a commitment must have a minimum 1:1 match from other limited partners that the fund will commit to invest in the District. The District cannot invest in a fund unless the fund can show that an amount at least equal to the SSBCI investment is coming from private limited partners and is destined for investment in the District.

There is also a recommendation about proportion rather than a hard cap. The program recommends that the SSBCI allocation account for no more than 20 percent of total fund size, so that the fund is self-sustaining without it. K Street Capital works the example through: a fund requesting a $5 million allocation must secure at least $5 million from other limited partners, anticipate investing $10 million in the District, and plan on closing a fund of at least $25 million.

Separately from the fund-level match, a fund must invest in a portfolio company on the same terms as the other investors in that financing, and must invest its own private capital in at least a 1:1 proportion alongside the SSBCI money.

What the program expects a fund to be, and how many will be chosen

The $26 million is awarded across three tranches, with five to seven managers selected and each receiving roughly $4 million to $5 million, though the program allows for larger or smaller amounts depending on fund size. Applications are accepted on a rolling basis, with a response expected within 30 days of the initial screening, a diligence period of six to eight weeks, and a final committee decision six to eight weeks after that. The full process is expected to take 16 to 20 weeks.

The program targets funds capable of driving at least 10:1 private capital to SSBCI capital, which is the leverage expectation Treasury applies across the District's whole portfolio. It expects the venture program to produce most of that leverage, and managers track and report leverage cash across the life of the fund.

As of the research date, DMPED states that the program is accepting applications for fund managers. It also announced on December 12, 2025 that the first managers had been selected, naming Hustle Fund and Lytical Ventures, and described the program as moving into its deployment phase. Those two statements are consistent with a rolling intake across three tranches rather than in conflict, but a manager should confirm which tranche is currently open.

The eligibility tests sit on the company, and they are specific

A fund can only place District SSBCI capital in businesses that meet all of the program's criteria at once, and the criteria are unusually concrete for a state-level program.

• A private company registered in the District and subject to taxation there.
• Fewer than 500 employees, including subsidiaries and affiliates.
• Headquarters in the District at closing, or a signed pledge to have them within six months of funding.
• At least 50 percent of employees working in and providing services in the District, or at least 25 percent of employees resident in the District.
• A technology-based business, meaning one that creates proprietary technology or leverages technology to offer a good or service.
• Early stage, meaning operations started within five years of the date of the investment.

There is a narrow exception for a company that does not meet those tests but is willing to open an additional District office where the economic impact would be substantial. It requires DMPED approval before investment, and no more than 10 percent of total investable funds may go to companies outside the jurisdiction.

Two round-size rules apply to the deal rather than to the company. No investment entity may invest in any single round of equity financing totalling more than $20 million, and Treasury asks funds to target investments in rounds averaging $3 million or less. Investments may take the form of equity or hybrid instruments including convertible debt and simple agreements for future equity.

The obligations a manager takes on with the money

Funds may request reimbursement for defined and documented services provided to portfolio companies, up to 1.71 percent of the allocated amount. That figure is an annual average calculated over the life of the fund up to ten years, so a ten-year fund reaches a maximum of 17.1 percent and a five-year fund a maximum of 8.55 percent. Carried interest is permitted under the limited partnership agreement, and the waterfall and carry are considered as part of the investment decision. Operating expenses, including the cost of meeting the reporting requirements, are not reimbursed.

Reporting runs quarterly and annually for the life of the fund, at both fund and portfolio company level. Quarterly reports include capital account statements, the balance of committed capital, distributions and exits, and employment figures. Annual reports document syndicated and follow-on investments, and audited financial statements are required annually.

Portfolio companies self-certify a list of their own, including remaining District-based for at least three years, meeting the Small Business Administration's definition of a small company, the absence of SSBCI insiders, the prohibited-business categories, and the restrictions on how proceeds may be used. The program also sets a SEDI objective of 33 percent of investments going to SEDI-qualifying companies, which affects the District's eligibility for additional capital in later tranches.

One published figure does not parse, and this page says so

DMPED's program page describes the funding deals its contracted firms will establish with District startups as ranging from $250,000 to $5,00,000. The second figure is not a well-formed number. Treasury's capital program summary describes the same range as District-based startups seeking $250,000 to $5 million of equity financing, so this page carries Treasury's reading and records where the other came from.

That is a small thing, and it is recorded because a manager or founder sizing a raise against a published range deserves to know which of two official pages the number came from.