VC-Owned Firms Get Shot at Federal R&D

Companies that are majority-owned by venture capital firms will once again have a shot at receiving Small Business Innovation Research (SBIR) awards.

House and Senate negotiators on Monday night reached an agreement on reauthorizing the SBIR program for six years and addressing the venture capital issue, a controversy that dates back to 2003. That’s when an administrative law judge ruled that small companies majority-owned by VC firms don’t qualify as small businesses since they aren’t independently owned. That made many small biotechnology companies ineligible for SBIR grants. The Biotechnology Industry Organization and the National Venture Capital Association have been trying to regain SBIR access for VC-owned firms ever since, according to a report in Portfolio.com.

Through the SBIR program, the 11 federal agencies with the biggest outside research budgets are required to spend at least 2.5 percent of this money with small businesses. The new agreement, which is attached to a defense reauthorization bill, increases that share to 3.2 percent over the next six years.  >>More here

SOURCE: portfolio.com

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