What does SBA actually check to decide my business is small, and does my investor's company count?

The SBA determines if a business is small based on its NAICS code, using either employee count or annual receipts, including the employees or receipts of any affiliates. For your software firm under NAICS 541511, the SBA will use the employee-based size standard. Employee-based size is the average number of employees for each pay period over the preceding completed 24 calendar months, and part-time and temporary employees count the same as full-time employees (13 CFR 121.106(b)).

Your investor's ownership in a larger IT company could lead to an affiliation determination, which means the SBA would include the larger company's employees in your firm's size calculation. Affiliation depends on factors like ownership, common management, and contractual relationships. The SBA checks your size at the time you submit your offer and again at the time of award (FAR 19.301-2). If your firm is found to be affiliated with your investor's larger company and exceeds the size standard for NAICS 541511, you would not be eligible for the small business set-aside.