Small Business Innovation Research Program

The Issue

The Small Business Innovation Research program (SBIR), run by the Small Business Administration (SBA), ensures a specific percentage of all federal research and development grants are reserved for small business applicants. This is critical seed money for innovative new businesses, including biotechnology companies.

There are a number of qualifications for SBIR grants. They are limited to companies that are at least 51 percent owned by an individual and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States. The companies can have no more than 500 employees, including affiliates.

In 2001, the SBA Office of Hearings and Appeals ruled that the definition of "individual" no longer included venture-capital-backed companies.

Our Position

We are concerned that denying SBIR funding to small biotechnology firms backed by venture capital funds is hampering or delaying work on life-saving and life-enhancing technology.

Venture capital investment, along with SBIR grant money, is a crucial source of funding for biotechnology research and development.

We support measures to restore SBIR grants to small firms backed by venture capital.

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