Last Thursday, the Senate Committee on Small Business and Entrepreneurship unanimously passed the “SBIR/STTR Reauthorization Act of 2009,” sending it to the full Senate for a vote. The bill would — for the first time in eight years — allow venture-backed companies some access to federal funding for innovation. However, the amount allocated to venture-backed companies doesn’t thrill the National Venture Capital Association (NVCA), which has lobbied to get venture-backed companies into the SBIR equation. Senate Bill 1233 would allow companies that are majority-owned by multiple venture firms to access up to 18% of SBIR funds at the Department of Health and Human Services and up to 8% at all other participating agencies. Although something is better than nothing, NVCA argues that venture-backed companies do not pose a threat to other businesses applying for the grants. “We’re very disappointed in what was passed,” says Emily Mendell, the NVCA’s vice president of strategic affairs. The SBIR program is scheduled to expire at the end of July and has already been extended twice. A 2001 administrative law judge ruling and subsequent rulings by the U.S. Small Business Administration closed the program to many venture-backed companies. The SBA interpreted the law to mean that start-ups which are majority-owned by venture firms are essentially considered part of the venture firm and all its other portfolio companies. The House Committee on Small Business is working on its own version of the bill, which is expected to come to a committee vote soon. It’s unclear if the House version allows SBIR grant participation — and if so how much — from venture-backed companies. A spokesman for the House committee said only that the bill “allows appropriate participation of venture-backed companies in the SBIR program.”

Go to: The Wall Street Journal

Posted July 1st, 2009 under Tech Transfer

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