Kerry stands for small biz, against lobbyists: SBIR eligibility expansion

[MH1]

(sorry, "wonk warning" didn't fit in the subject line - thought it was obvious though )

Battle taking shape over innovation grant funding (Article in today's BG)

...
If biotechnology industry lobbyists have their way, small companies like Delsys, the Massachusetts firm that developed monitors that give muscle-by-muscle feedback to Olympians and astronauts, might have a tougher time winning future grants.

Federal agencies with research-and-development spending exceeding $100 million must devote 2 1/2 percent of their budget for research conducted outside the agency to innovation grants. From fiscal year 1983 through 2004 , the program awarded more than $17 billion to more than 82,000 projects. Massachusetts-based small businesses, on average, receive $300 million in innovation grants each year.

Changes proposed in Congress, however, could increase competition for that government seed money. Right now only companies with up to 500 employees and up to 51 percent venture capital funding are eligible for the awards. New measures, still under consideration, would make small biotechnology companies with venture capital funding exceeding 51 percent eligible for the grants.

(snip)

US Senator John F. Kerry , Democrat of Massachusetts , says he supports local biotechnology companies, but is reluctant to expand their access to funds designed to help companies too small and new to garner venture capital.

"We are opening up a whole new deal here for these power-packed entities, which have the ability to attract capital, to come in and take a limited pot," Kerry, senior Democrat on the Senate Committee on Small Business and Entrepreneurship , said during a July hearing.

Interpretation: there is only so much funding for these grants to go around. Lifting the cap on VC funding will allow bigger "small" players to compete against the smaller players that are now getting the grants, thus cutting into the benefit for very small and very new businesses. Biotech lobbying firms are really happy about the proposed change; Kerry is opposing the change (and thus the lobbyists.) This is no surprise to those of us who know that Kerry has historically championed very small businesses, and that Kerry has a record of basing his votes on principle. However, it may cause some confusion to some poorly informed folks in certain corners of the lefty world, who have been drinking the counterpuke punch about Kerry.

Please do feel free to spread tidbits like this in places those easily confused folks hang out.

[MBS]

1. thanks for posting this

I'd seen it in the Globe this morning but only by accident.. it's kind of buried in the business section. Kerry's reasoning is very sound on this issue . I know the National Science Foundation SBIR program well, and I also know NSF's very limited budget even better, and it would be OUTRAGEOUS to let larger companies compete for this money, both from the perspective of small business and also knowing the priorities and budget limitations of the NSF.

[ProSense]

2. It's simply amazing

how many ways they can come up with to kick small businesses out of the competition. It reminds me of the classification of minority-owned businesses, suddenly companies one-third owned by minorities were shutting out companies 100% owned by minorities. If these companies are funded more than $51 percent by VCs, why allow them to potentially shut out smaller companies? It will happen because these companies will be then considered further along and stronger as demonstrated by their VC support.

[MH1]

3. Okay, I've done it now

cross-posted this with modifications in the Economy forum:

http://www.democraticunderground.com/discuss/duboard.ph...

I've never posted there before, so I don't know how it will be received.