No. Venture capital operating companies, hedge funds and private equity firms are allowed to hold minority shares of SBIR/STTR awardee so long as they do not have control of the awardee company and so long as their affiliation with the awardee, if any, does not put the awardee firm over the size limit. The exception to this is if the VC is itself more than 50% directly owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States. In such a case, that VC is allowed to have majority ownership and control of the awardee. In that case, the VC and the awardee, and all other affiliates, must have a total of 500 employees or less. For SBIR awards only, some agencies may make a portion of their awards to companies that are majority-owned by venture capital operating companies, hedge funds, or private equity firms. This is allowed only if no one venture capital operating company, hedge fund, or private equity firm holds more than 50% for the stock.