Venture Funding and the NIH SBIR Program

The Small Business Administration issued a policy directive in 2002, the effect of which has been to exclude innovative small firms in which venture capital firms have a controlling interest from the SBIR program. This book seeks to illuminate the consequences of the SBA ruling excluding majority-owned venture capital firms from participation in SBIR projects.

This book is part of the National Research Council's study to evaluate the SBIR program's quality of research and value to the missions of five government agencies. The other books in the series include:

• An Assessment of the SBIR Program (2008)
• An Assessment of the SBIR Program at the National Science Foundation (2007)
• An Assessment of the Small Business Innovation Research Program at the National Institutes of Health (2009)
• An Assessment of Small Business Innovation Research Program at the Department of Energy (2008)
• An Assessment of the Small Business Innovation Research Program at the National Aeronautics and Space Administration (2009)
• An Assessment of the Small Business Innovation Research Program at the Department of Defense (2009)

Table of Contents

• Front Matter
• Executive Summary
• 1 Introduction
• 2 Study Methodology
• 3 Venture Funding for NIH Phase II Winners, 1992-2002
• 4 Focus on the Top 200 Award Winners
• 5 Other Sources of Data on the Participation of Venture-owned Firms
• 6 Comparing Project Outcomes
• 7 Impact of the SBA Ruling on the NIH SBIR Program
• Appendixes
• Appendix A: Venture-funded Firms Among the 200 Most Prolific Winners of NIH Phase II Awards 1992-2002
• Appendix B: NRC Non-participant Survey
• Appendix C: NIH List of Firms Excluded on the Grounds of Venture Capital Ownership
• Appendix D: Venture-funded Firms: Data from Hoover's Small Business Database and VentureSource
• Appendix E: Analysis of the Evidence Submitted by BIO
• Appendix F: SBA Administrative Ruling on Appeal of Cognetix, Inc.
• Appendix G: Letter from Elias A. Zerhouni, Director, National Institutes of Health to Hector V. Barreto, Administrator, U.S. Small Business Administration, June 28, 2005
• Appendix H: Testimony by Steven C. Preston, SBA Administrator, to the House Small Business Committee, March 13, 2008
• Appendix I: Bibliography
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