Venture capitalists may be gaining influence at the expense of small businesses as a result of President Barack Obama's pick to lead the Small Business Administration, a small business advocacy group warns.

The American Small Business League is worried that Obama's appointment of venture capitalist Karen Gordon Mills to head the SBA is a sign that venture capital agendas may advance this year, in some cases to the detriment of small businesses and small-business federal contractors, said Chris Gunn, a spokesman for the group based in Petaluma, Calif.

A case in point is the upcoming reauthorization of the Small Business Innovation Research program. There is language in both House versions of the legislation that would allow more venture capital firm investment in companies participating in the program, Gunn said.

“It sets a dangerous precedent for that and for other small-business programs,” Gunn said. “We do not want to see an expansion of the definition of small business. We are trying to tighten the definition.”

Mills is president of private equity firm MMP Group, co-founder of venture capital firm Solera Capital, and an adviser to Maine Gov. John Baldacci.