DeKALB – A state political action committee is up in arms about comments gubernatorial candidate Bruce Rauner made last week about venture capitalists steering away from investing in small businesses.
The Illinois Freedom PAC, a public-employee union backed group, on Monday blasted comments Rauner, the Republican trying to unseat Gov. Pat Quinn, made Wednesday to Northern Illinois University students as summarized in the Daily Chronicle. During his appearance, Rauner said venture capitalists avoid investing in cash-driven businesses with a high level of competition, a category mom-and-pop businesses fit into.
“This is part and parcel of Bruce Rauner's attitudes,” said Illinois Freedom spokesman Neal Waltmire. “It's the Wall Street, make a profit at any cost attitude.”
Rauner made the comments Thursday after an entrepreneurship student asked what red flags venture capitalists consider before investing. Other red flags Rauner noted were cyclical and seasonal businesses.
Rauner also said venture capitalists often avoid markets that are highly cash driven with low competitive barriers to entry, or those where competition could easily appear.
“Your typical small mom-and-pop business in America is a low-barrier-to-competition, cash business,” Rauner said. “So, that's why it's frustrating because a lot of small business owners, mom-and-pop business owners, they're frustrated, like, 'venture capitalists won't invest with me. Why won't they put money into my firm or my industry?'
Because, you know, you get more than a little bit bigger, boom-boom, you've got competition coming at you.”
Rauner spokesman Mike Schrimpf said Rauner's comments were misconstrued by the Chronicle, asserting Rauner was not advising students not to invest in small businesses, but warning them about red flags. He also said the Illinois Freedom PAC was making much of one sentence in a larger story.
He pointed to Rauner's investments in small businesses, as well as his policies to freeze property taxes and eliminate the 67 percent personal income tax hike as evidence Rauner supports mom and pop shops.
"If there's one candidate that's going to help small businesses grow, it's Bruce," Schrimpf said.
Waltmire said his group would continue to highlight Rauner's comments about small businesses during the remaining two months of campaigning.
Electronic campaign filings show the Illinois Freedom PAC is largely funded by the American Federation of State, County and Municipal Employees union, the Illinois Federation of Teachers, the Illinois Education Association and the Democratic Governor's Association. The group spent more than $3 million on advertising leading up to the March primary election, according to campaign filings.
