Thu 7 Aug 2008
Senate Reauthorizes Small Business Funding Programs
Posted by Megan Dorn under Technology, Business and Politics, Small Business, Financing
Two important small business research programs were unanimously reauthorized by the Senate Committee on Small Business and Entrepreneurship last week. The Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer (STTR) program will both be around for at least another 14 years.
The SBIR program provides funding for small businesses to explore their technological potential. Enacted in 1982, the SBIR program requires 11 federal departments and agencies to set aside a portion of their research and development (R&D) money for small businesses. It’s no secret that the entrepreneurial sector is ripe for technological innovation. Unfortunately, conducting intense research and development is usually beyond the means of a small business. By reserving this funding, the SBIR program enables small innovative technology companies to compete with larger businesses.
The STTR program reserves a percentage of federal R&D funding for both small businesses and nonprofit research institutions. The idea behind the STTR program is that research institutions are vital to developing high-tech innovations, but rarely is the innovation enacted in a practical environment. Small businesses on the other hand can enact technology in a practical environment, but don’t have the time or resources to develop them. The STTR program forms partnerships between the two entities and provides them with joint funding. Small businesses can then profit from the commercialization of the technologies.
To become a part of either of these programs you have to meet certain requirements. They include:
- American-owned and independently operated
- For-profit
- Principal researcher employed by business
- Company size limited to 500 employees
With the reauthorization of the bipartisan bill, however, comes the compromised inclusion of small businesses that are majority owned and controlled by multiple venture capital companies, which was a hotly contested issue.
This is a great opportunity for any small tech startup looking for funding to help expand its reach. Both programs are highly competitive, but then again so are most kinds of funding. If you’re at all interested, I encourage you to look into these programs. They could be the ticket to taking your business to the next level.
