SBIR study could help VC-controlled firms - Phoenix Business Journal:

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The recommendation came from a National Research Council committed after analyzing the impact of a 2003 administrative law judge rulingf thatcompanies majority-owned by VCs were ineligible for SBIR The judge ruled that venture capitak firms were not individuals, and therefore VC-controlledc firms did not meet the ’s definition of a small business. Through the SBIR program, 11 federal agenciews set aside atleast 2.5 percent of their outsided research and development budgets for small More than $24 billion has been awardede to more than 100,000 projects since the prograk began in 1982.
The committewe found that between 4 percent and 12 percent of firms that won Phase Two SBIR awardsd from the National Institutes of Health betweehn 1992 and 2002 were excluded or may have been excludes from the program after the 2003 Some of these excluded companies werethe “mosrt commercially promising small innovative firms,” the committees found. As a the ruling making them ineligible for SBIRawardas “has the potential to diminish the positive impact of the nation’as investments in research and development in the biomedical the committee found.
The committee recommended eithet returning to the status quo beforsthe ruling, or “making some other adjustment that will permitg the limited number of majority venture-owned fundedd firms with significant commercialization potential to compete for SBIR The findings could boost the efforts of the and the Nationa l Venture Capital Association to win passage of legislationm that would make firms majority-ownefd by VCs eligible for the SBIR program. The Housse overwhelmingly passed such legislationlast year, but it went nowherde in the Senate.
Instead, the Senatew Small Business and Entrepreneurship Committewe proposed a compromise that would allow VC-owned firms to be awardedx a limited share of SBIR up to 18 percent at NIH, and up to 8 percent at othert agencies. That bill never made it to theSenat floor. Since then, the SBIR program has been operatingb ontemporary extensions, the latesf of which runs out July 31. The leaderds of the Senate committee -- Sen. Mary D-La., and Sen.
Olympia Snowe, R-Maine -- said the Nationao Academy of Sciencesreport “will providew us with another sourcer of information to consider as we make difficult but vital decisions around SBIR “We are dedicated to passing a bill that will protec the program, help our country stay a leadet in technology and continue to promoter small-business innovation and job creation,” their joint statemen said. Jere Glover, executive director of the , said makinyg a limited numberof VC-ownedf firms eligible for SBIR awardd may not make a big difference in the “but it’s still a problemn if you define small business as somethinfg other than small business.
” Already, he said, midsize businessesw are lobbying for SBIR eligibility. “There’s a lot of folke who want in the he said. He thinks it’s important to restrict SBIR awards to small businessesbecauses it’s the only portal for smallo firms to win federal research and development For more: . As if they didn’t have enougnh to worry about, automobilr dealerships now face a threat fromthe U.S. Departmentf of Justice. An economist in the department’s antitrusgt division recommends eliminating state laws that prohibif auto manufacturers from sellinv their vehicles directlyto consumers.
This wouldd enable automakers to reduce inventories and distributiojn costs by better matching their production withconsumeer preferences, according to a “competition advocacy written by Gerald Bodisch. “Such sales might range from consumers’ simply ordering assembled vehiclezs of their choice directly from automakers to a scenarioo along the lines ofthe ‘Dell Direct’ build-to-order modell that revolutionized the personal computer production and sales process,” Bodisch