How the Fund is Expected to Work
Keating Capital is a perpetual fund, in which each stockholder is proportionally invested in all of the fund's holdings and will receive a proportional distribution of any income and capital gains generated by the fund. Stockholders will be able to sell their shares of Keating Capital once the fund is publicly traded, which is expected to occur in Q4 2011.
Business Development Company Structure
Keating Capital has elected to be regulated as a business development company, which is a type of closed-end investment company created by Congress in 1980 in an effort to help public capital reach smaller and growing private and public companies. BDCs are similar in structure to private equity or venture capital funds that offer and sell their shares to the public, but with different investment strategies and objectives. By law, a BDC must make at least 70% of its investments in Eligible Portfolio Companies, which are generally U.S. companies that are either private or have a market capitalization of less than $250 million.