SBIR widens cash net

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Biotech companies with venture capital backing are once again eligible for federal funding. In January, the US Small Business Administration (SBA) implemented changes to the federal Small Business Innovation Research (SBIR) program to broaden eligibility for firms owned by multiple domestic venture capital investors. “We applaud the [Obama] administration and the SBA for updating this program to support all emerging biotech companies,” says Jim Greenwood, president and CEO of the Biotechnology Industry Organization (BIO) in Washington, DC. Greenwood's main concern is for its rapid implementation to enable a small majority of venture capital–backed companies to once again participate in the program. The new rules detail how to implement the SBIR/STTR Reauthorization Act of 2011, which extends SBIR through September 30, 2017. Although the law authorizes gradually rising funding for SBIR set-asides to support companies, that planned expansion is in jeopardy because of the threatened federal budget sequester and other plans that could reduce federal outlays for research through agencies such as the National Institutes of Health. Meanwhile, a new and related component of these programs, the Small Business Investment Company capital investment program has named its first licensee: Hatteras Venture Partners. The Research Triangle Park, North Carolina–based firm has raised $125 million to invest in early-stage companies, and those private-sector resources are to be used in conjunction with $1 billion from SBA over the next five years, dependent, of course, on forthcoming allocations of funds from Congress.

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Fox, J. SBIR widens cash net. Nat Biotechnol 31, 186 (2013). https://doi.org/10.1038/nbt0313-186a

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