Venture Capital and Biotechnology Organizations are lobbying the Senate and House Small Business Committees in an effort to change SBIR eligibility rules. This action is intended to allow VC firms that do not qualify as small businesses to be able to own and control small businesses that are competing or currently receiving SBIR funding.

VC and Biotech organizations are trying to sway the committees to make these changes to the Small Business Administration Reauthorization bill, coming up for vote in the next few weeks. By moving quickly, these organizations hope to avoid public hearings or comments.

In Support - Several small biotech businesses have been ruled ineligible for SBIR funding because of non-qualifying VC ownership. VCs feel this action unfairly targets these small businesses and their ability to compete for additional SBIR funding. Claims are also made that these small businesses (owned and controlled by large VCs) can do a better job of serving research and development by having access to the additional needed capital.

In Opposition - If Congress or the SBA changes the eligibility rules, small businesses owned by large VC organizations with millions of dollars of available capital would compete head to head with small businesses that have no such funding potential. The early stage funding process for qualifying small businesses would be in jeopardy and the entire spirit of the SBIR program would be subverted to serve large interests (Corporate Welfare). The entrepreneurial spirit so vital to the SBIR program's success would be quashed.

What is Needed - Your input and comments on this issue are vital to help the congressional committees make recommendations for the good of the SBIR program. We ask for your comments, which will be shared with the congressional committees.

We also want to help make your comments known to your legislators. Senators and Representatives want to serve the best interests of their constituents, and they need to hear from you.

Use the Contacts link at the top of this page to find your Senator and Representative. Also please leave comments with us for forwarding to the appropriate committees. We welcome comments from both sides of this issue, but time is of the essence.