SBIR Gateway VC Discussion Group
(Archived May 2004)
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Updated 05/22/0499 messages
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11/25/03
  13:41:35
Name withheld by request Norman, OK
Msg 61 of 99
The SBIR program needs to continue being focused on the provision of capital to the 'island' innovator based on his/her idea's scientific merit and commercial viability. The function of the SBIR program is to provide capital for highly risky innovative concepts that the VC organizations abhor. The VC's currently already benefit from the SBIR program as they often get to invest in the Phase III phase (reduced risk) of an inventor's product or idea. In essence, the subversion of the SBIR program to suit the demands of the VC's will derail the development of innovative ideas from individual inventors and will only contribute to additional subsidization of VC investments, which already benefit from various tax subsidies. Come on guys & gals, letís be nice and play fair, giving every bloke a chance to fairly compete
Vote:   NO 
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11/25/03
  15:13:29
Dan Pankowsky Nashville, TN
Msg 62 of 99
Dear Sirs,

Thank you for this forum. The original intent of the SBIR/STTR program was to provide initial capital to small ventures that may not have other avenues of funding available. By definition, companies already owned by venture capitalists no longer fit this definition and should therefore be excluded. It is attractive to have a project validated by the SBIR/STTR review process, but there are other avenues available for this kind of review, particularly ordinary, peer-reviewed scientific literature. Companies with access to capital can already fund such studies. The SBIR/STTR program allows those that don't access to the same.

Thank you.

Vote:   NO 
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11/25/03
  19:36:23
Name withheld by request Tucson, AZ
Msg 63 of 99
If the SBIR rules are changed to allow VC owned and controlled organizations to compete for SBIR funding, then it is no longer SBIR funding and it should be called VC's welfare.
Vote:   NO 
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12/02/03
  01:16:37
Name withheld by request Charlotte, NC
Msg 64 of 99
If the current SBIR program is changed, large global corporations will begin to compete for critical dollars set aside for small businesses. These corporations often invest heavily in VC firms and play a leading role in investments. With the participation of large global corporations in the US SBIR fund, the dynamics of innovation in these critical small companies will dramatically change.

As globalization of technology development continues push forward, it is important the United States keep its technology edge. It is well documented that small businesses nurture disruptive technologies. The continued US development of disruptive technologies is required for technical superiority and economic growth. Small businesses take risks without worrying about rapidly returning money to their stockholders. Small businesses pursue small niche markets where disruptive technologies often occur. Small businesses are nimble and rapidly change to changing market dynamics. VC firms and their global corporate affiliations need large markets with rapid returns on investment. These criteria often do not translate into world leading technologies, but technologies that will make money for the short term.

The current guidelines for the SBIR fund allows for novel disruptive technologies to be nurtured. If this nurturing is not allowed to occur, it is highly likely other nimble global innovators will begin to compete with the US for technology leadership.

Vote:   NO 
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12/02/03
  14:32:24
Steve Ebstein Wellesley, MA
Msg 65 of 99
As I understand it, a major reason for the establishment of the SBIR program was to mandate access of small businesses to R&D dollars that would otherwise get swallowed by large companies with better access and marketing to federal agencies (think DoD and big aerospace). Judged by this standard, the proposed rule change clearly violates the spirit of the program.

Things are murkier if one is considering economic impact of SBIRs. It seems to me cases can be made pro and con the proposed rule change. However, since my experience is that government R&D managers do not view their job as maximizing ROI on the national investment - they simply want to advance technologies that further their agency's mission, I don't see this as a compelling reason to produce (and cook) the relevant statistics.

If a small business is successful enough to attract a buyer or investor that takes them out of the SB category, good for them. If they want to bend the rules so they can compete for SBIRs, shame on them.

Vote:   NO 
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12/03/03
  08:38:44
Daniel P. Bednarik, Ph.D. Gaithersburg, MD
Msg 66 of 99
The original mandate of the SBIR program never included exclusivity towards either government funding OR venture capital. The point of this program was to foster creative development paths while providing seed money to facilitate such activities.
Vote:   YES 
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12/04/03
  10:22:37
Simon Goldbard Mountain View, CA
Msg 67 of 99
This new strict interpretation of the rules leaves out probably 40% of companies that need the money must. Just because these companies are venture backed does not mean that there are not struggling to find additional funding to keep going. In the current venture enviroment even public companies are competing for the same funds (venture and federal). This rule does not make any sense!! Some of the must promising companies are left out of a vital source of funding in the past. A soulution would be may be to limit the amount of money that can be granted, but to eliminate it altogether does not make any sense.
Vote:   YES 
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12/04/03
  14:08:20
Kevin Johnson , NC
Msg 68 of 99

Vote:   NO 
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12/08/03
  04:02:21
Roger J. Molitor Titusville, FL
Msg 69 of 99
Chromalux was the recipient of an SBIR and we would never have gotten the award if large corporations would have been allowed to circumvent the rules by funding a token small business for the sole reason of getting to the SBIR funds set aside for small businesses.
Vote:   NO 
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12/10/03
  12:14:57
Marcene Sonneborn Syracuse, NY
Msg 70 of 99
Allowing VC-owned and controlled small businesses into the program would compromise the long-standing benefits of this program, especially helping small businesses to obtain support for high risk technologies and projects that are not directly ready for commercialization. If a company has attracted VC attention, it is already proven feasibile just by the VC interest. VCs do not invest in technologies without a strong indication that a commercial - and large commercial market exists. If Congress wants to help pharmaceutical companies get more support for R&D, create a new program started for that purpose. Also, allowing VC-companies to participate will tip the balance in favor of biotech companies, to the detriment of other technologies that might solve the same problems but in a more innovative way, and that are not able to attract venture capital because the technology has yet to be proven. Changing the SBA's policy on this would devastate the SBIR program and turn it into a true corporate welfare program for pharmaceutical companies. Protect the small innovative business that is working on an unproven but potentially revolutionary technology or product and leave the program as it is.
Vote:   NO 
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