SBIR Gateway

SBIR Insider Newsletter
September 27, 2007 Update Edition

Dear SBIR Gateway Insider,

Dear SBIR Insider,

The legislation we alerted you to, H.R.3567 was overwhelmingly passed by the House today (Wednesday Sept. 27, 2007) by a vote of 325-72, with 35 not voting. This is the legislation that amongst other things, removes the affiliation size eligibility standard from a VC's ownership and control of small business.

We are supposed to be comforted by the fact that they did keep a provision that the VC itself cannot exceed 500 employees. How many VC's can you name that have >500 employees?

Although many of you mobilized into action, we were too late in the cycle, of this bill, that was deliberately rushed through the House to prevent an opposing perspective for consideration. Some of your voices were heard, and a small amendment was made by Representative Steve Chabot (R-OH) that limits a VC's ownership to 50%. I think you'll find this too little, too late.

In an LA Times article this morning, Jere Glover of the SBTC called this "the worst piece of small-business legislation I've seen in 25 years."

There are some good and needed items in this bill, but Title V opens a can of worms for beyond the language description. Ms. Velazquez's final comments after passage was to thank all those involved, including those who were "invaluable" from the outside, including: the Biotech Industry Organization (BIO), the National Ventura Capital Association (NVCA) and several other large financier industry groups.

NOTE: There was not one, (let me repeat) NOT ONE small business association or trade group (such as the National Federation of Independent Business (NFIB), National Small Business Association (NSBA), Small Business Technology Council (SBTC) or American Small Business League (ASBL)) that was brought in by the committee to be part of this. No attempt at all for a compromise with the small business community. Were you aware that those of you who have opposed this type of VC access, have been termed "self interest award hogs" by organizations such as BIO. That's the new version of "prop mill".

This issue is now closed in the House, but the small business community can only hope that greater wisdom will prevail in the Senate and something reasonable can come of this.

I want to thank my readers for the many comments, both pro and con on this issue. To those staffers who at least offered to listen, even if they disagreed, thank you for the opportunity. To those staffers who got so angry with me and others who brought dissenting voices into this mix, I make this promise; If my approval rating ever approaches that of the current Congress (11%), I'll get out of this business and leave you alone.

Best wishes,


Rick Shindell
SBIR Gateway
Zyn Systems
40 Alderwood Dr.
Sequim, WA 98382
[email protected]

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