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Print Edition StoriesTuesday, July 7, 2009
Congress ponders SBIR bills, could impact VC-backed companies
By Rodney H. Brown
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The U.S. House of Representatives this morning closed off any amendments to a pending bill that would both reauthorize the funding for Small Business Innovation Research grants and change the nature of which companies get them.
The bill, HR 2965, is called the Enhancing Small Business Research and Innovation Act of 2009. It looks to reauthorize funding for SBIR grants through 2011, but it also contains language that would change how companies backed by venture capital get access to those funds.
Current law states that no more than 11 percent of awardees of SBIR funds can be backed by venture capital firms. The new bill eliminates that cap altogether, in favor of language that says no firm that is more than 50 percent owned by VCs can receive SBIR money, but any firm with less than that level of VC ownership is eligible, as long as they fit the other criteria for being a small business.
The House Small Business Committee recommended HR 2965 for vote on June 24, and a vote could happen as early as Wednesday, experts say.
The U.S. Senate has its own version of a bill concerning the SBIR program, S.1233, the SBIR/STTR Reauthorization Act of 2009. That bill, which was co-sponsored by Sen. John Kerry, D-Mass., Sen. Jeanne Shaheen, D-N.H., and Sen. Olympia Snowe, R-Maine, looks to reauthorize the program through at least 2023. It also would immediately bump the amount of Phase 1 grants from $100,000 to $150,000 and Phase 2 grants from $750,000 to $1 million.
The Senate bill would also change how the SBIR program deals with VCs — most agencies that dole out SBIR grants would have to cap the funds going to VC-backed companies at 8 percent of total, not 11 percent. The exception would be the National Institutes of Health, which would be allowed to increase that percentage to 18 percent.
The Senate bill has also been recommended by its committee, the Small Business and Entrepreneurship Committee.
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