Money Buzz 08/04 Tax code help, community-minded VCs and more

Cracking the Code

You've got everything you need to run your businesswell-except a family member with the accounting know-how toadvise you on navigating the tax code. Never fear. Your Uncle Samhas stepped up to the plate with the Taxpayer EducationCommunication (TEC) Small Business/Self-Employed OperatingDivision, a catch-all resource designed to demystify the tax codeand what it means to your business.

With ample content on its Web site,the TEC isn't shy on information. Log on, and you'll gainaccess to such resources as business tax forms, along with a seriesof free instructional CDs and video workshops on issues likerecord-keeping, business use of the home, employment tax andelectronic tax filing. That's the kind of help that may come inhandy for those of you lacking the accounting expertise andresources you need to meet your tax obligations efficiently.

Feeling a bit Web-shy? You can also submit your tax questions bye-mail or by phone through the toll-free Business and Specialty TaxLine (800-829-4933). Maybe that tax code doesn't look sodaunting after all.

Won't You Be My Neighbor?

Feeling shut out by the rapid-growth-obsessed VC circuit? Neverfear, there's another breed of venture funding on the rise-andfor these investors, the social benefit a venture will yield isjust as key as financial returns.

Unlike traditional VC funds, community development funds (CDFs)seek first and foremost to invest in companies that will ben-efitlow-income workers in distressed communities, explains KerwinTesdell, president of the New York City-based Community DevelopmentVenture Capital Alliance (CDVCA), which runs a community fund andalso serves as a trade association for funds nationwide andinternationally. "Fifty years ago, you could support yourfamily and get benefits working for a manufacturing plant, butthose jobs are disappearing," he explains. "CDFs investin companies that will produce those jobs in the neweconomy."

While criteria and amounts vary, CDFs typically focus on aspecific geographic region and invest from $50,000 to more than $1million. The CDVCAWeb site offers a list of funds by state, as well as eachfund's mission and investment criteria.

CDFs are not to be confused with charities, however, saysTesdell. "Prospective ventures must also [have] a strongmanagement team, a clear financial plan and an exit strategy,"he says. "A lot of VC funds look for high-tech firms thatproduce jobs for three Ph.D.s and a secretary. Those aren't thekinds of businesses we look for."

is a freelance writer in New York City specializing inbusiness and finance.