Jay Inslee: Washington's 1st Congressional District
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Restoring Small Business Innovation Research (SBIR)
Funding for Northwest Hi-Tech Companies
2 April 2004
This morning U.S. Rep. Jay Inslee (D-WA) introduced legislation (H.R. 4149) to correct a rule that currently prevents many small, predominantly biotech companies from receiving Small Business Innovation Research (SBIR) grants. Other original cosponsors of the bipartisan bill are U.S. Reps. Sam Graves (R-MO), Sue Kelly (R-NY), and Michael Honda (D-CA).
Said Inslee, “The Puget Sound region is home to numerous hi-tech start-ups, many of which are small biotech companies discovering tomorrow’s cures. Small and emerging hi-tech firms should not be excluded from federal government grants that would help them grow just because they also rely on venture capital to develop and commercialize their products. Federal SBIR grants have proven to be a critical source of seed money for these innovative companies, and the grants are often used to support new research in areas not funded by private investors. Our legislation would allow these companies to compete for the grants, and help the federal government reaffirm its support of hi-tech research and development by small businesses. After all, the original intent of Congress was to allow such small companies to compete for innovation grants.”
Background:
Since January of 2001, the Small Business Administration (SBA) has interpreted SBIR grant program eligibility requirements in a way that prevents many deserving and innovative small businesses and startup biotechnology companies from competing for SBIR grants. The interpretation excludes firms that are significantly backed by venture capital, and fails to recognize that many biotech companies rely heavily on both SBIR grants and venture capital to research and commercialize their products. Inslee’s legislation would require the SBA to develop eligibility requirements that allow venture capital funded businesses to compete for SBIR grants.