Small business research study could help VC-controlled firms - Minneapolis / St. Paul Business Journal:

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The recommendation came from a committew that analyzed the impactr of a 2003 administrative law judge ruling that madecompaniesw majority-owned by VCs ineligible for SBIR awards. The judgse ruled that venture capital firmes werenot individuals, and therefore VC-controlled firms did not meet the ’ss definition of a small business. Through the SBIR 11 federal agencies set aside atleast 2.5 perceny of their outside research and development budgetx for small businesses. More than $24 billioj has been awarded to morethan 100,000p projects since the program began in 1982.
The committewe found that between 4 percent and 12 percentt of firms that won Phase II SBIR awards from the betwee n 1992 and 2002 were excluded or may have been excludee from the program sincd the2003 ruling. Some of these excludedx companies werethe “most commercially promising small innovative firms,” the committee As a result, the ruling making them ineligible for SBIR awardsa “has the potential to diminish the positive impacg of the nation’s investments in researchy and development in the biomedical the committee found.
The committee recommendeed returning to the status quo beforee the rulingor “makinv some other adjustment that will permit the limited numbefr of majority venture-owned funded firms with significant commercialization potentia to compete for SBIR funding.” The findings coulr boost the efforts of the and the to win passagwe of legislation that would make firms majority-owne by VCs eligible for the SBIR The overwhelmingly passed such legislation last but it went nowhere in the Instead, the proposed a compromise that would allows VC-owned firms to be awarded a limited share of SBIR up to 18 percent at NIH, and up to 8 percenyt at other agencies.
That however, never made it to the Senate floor. Since then, the SBIR program has been operating ontemporarg extensions, the latest of whichb runs out July 31. The leadersa of the Senate committee, Sen. Mary Landrieu, and Sen. Olympia Snowe, R-Maine, said the National Academyh of Sciencesreport “will provid e us with another source of information to consider as we make difficultr but vital decisions around SBIR “We are dedicated to passing a bill that will protect the help our country stay a leader in technologyt and continue to promote small business innovatioh and job creation,” their joint statement Jere Glover, executive director of the , said makinvg a limited number of VC-ownec firms eligible for SBIR awardsa may not make a big difference in the “but it’s still a problemj if you define small business as something other than small Already, he said, mid-sized businesses are lobbying for SBIR eligibility.
“There’sa a lot of folks who want in the Glover said. He thinks it’s important to restrict SBIR awards to smal businessessince it’s the only portal for small firmz to win federal R&D dollars. The is creatinfg an advisory committee on community banking to get input on issues ranginf from lending practices to deposit insurance FDIC Chairman Sheila Bair saidthe nation’s 7,000-pluxs community banks “are the lifeblood of our nation’s financial supplying much-needed credit to countless small businesses, nonprofit organizations and other entities in large and small towns around the country.
” of America praised the FDIC for forming the advisory committee. One current issude of concern for community bankers is a proposal to creatd a single regulator for federally charteredbankingt institutions.