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2. Overview
3. Frequently Asked Questions
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Overview of The Texas Certified Capital Company Program

As the Texas economy continued its expansion from the 2001 recession, the need for seed and growth capital for young companies became more intense. Unfortunately, venture capital funds and angel investors were often the only sources of funds for entrepreneurs. In the aftermath of the “dot-com” boom and bust, venture funds became much more risk-averse than they were a decade prior. The result was that there existed an enormous need for capital among startup companies in Texas that otherwise had few funding options.

In 2005 a new economic program addressed this need, authorized by the Texas Legislature in 2001 and implemented in 2005, the Texas Certified Capital Company Program One provided alternative sources of venture capital to Texas entrepreneurs. A Certified Capital Company (CAPCO) is a private government-sponsored venture capital company formed to stimulate job creation and to increase the availability of growth capital for small businesses located in Texas.

Funds were provided by participating insurance companies who, in turn, received premium tax credits equal to 100 percent of the amount of their investment, interest income, and in some cases an opportunity to participate in the profits of a CAPCO. During 2005, ten new Texas CAPCOs were authorized for Program One and together, they raised $200 million of venture capital through certified capital notes or “qualified debt instruments” to insurance companies. In Texas, the state Comptroller of Public Accounts implements and administers the CAPCO program through the Texas Treasury Safekeeping Trust Company.

Read more about the history of the CAPCO program »

Current Certified Capital Companies

Additional Resources

• Frequently Asked Questions
• The statute for the CAPCO program is found in the Texas Insurance Code Section 228.001-228.353.
• The statute is the product of Senate Bill 601 passed by the 2001 Legislature, as amended by House Bill 2425 passed by the 2003 Legislature.
• The regulations for the Texas Certified Capital Companies program are contained in the Texas Administrative Code.

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