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Friends and Allies: showing their support
Effective functioning of SBIR is fundamentally not just of interest and concern to the small businesses involved.
It is a program of consequence to others in the Technology Innovation community - large firms and mid-sized firms in various forms of collaborative relationship with SBIR-involved firms - an already important but also growing program phenomonon personnel with program involvement in mission agencies various Trade and Professional organizations with large and small firm membership state elected officials and associated economic development entitites academic institutions and other non-profits professional service providers and, perhaps not so obviously, some in the investment community who understand the value-added that SBIR-involvement often brings.
Many of these have expressed their support for program continuance and some have put that sentiment in writing. Others are open to the suggestion that now is a time to make that support known.
If you are aware of such efforts and those which can be publicly listed i.e. can be posted here, please let us know.
If you are in a position to encourage that public statement of support, we urge you to do that too.
To date we are aware of the following Friends and Allies:
Industrial Research Institute (IRI)
Licensing Executive Society (LES)
International Optics and Photonics Society (SPIE) story
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July 22, 2009 - SBIR Conferee letter - Letter addressed to SBIR Conferees and all Members supportive of maintaining the diversity of SBIR which has been the hallmark and strength of the SBIR program these many years. Letter urges acceptance of the Markey Tsongas amendment that clearly had the majority vote before being ruled Out of Order by the House Rules Committee the day before debate and vote on SBIR in the House.
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July 12, 2009 - S.1233 SBIR Reauthorization bill passed in the Senate by Unanimous Consent.
Next Step - appointment of conference committee to reconcile two bills. |
| July 6: Dear Colleague proposed Amendment Letter |
| First thing after the July 4 recess, on Monday, July 6, 2009 an important Dear Colleague Letter was sent to every Member of the House of Representatives by Reps Ed Markey and Niki Tsongas laying out the two provisions of their proposed Amendment to HR 2965 - the Enhancing Small Business Research and Innovation Act of 2009
You are urged to encourage your Member to consider seriously signing this Letter so that SBIR Reauthorization can move forward.
Designed to mitigate the seriously adverse affects of the bill which was voted out of the House Small Business Committee and approved by voice vote by the House Science Committee just before the July 4 Recess, the amendment focuses on TWO issues: the fact that HR 2965 goes too far towards
- enabling a situation in some agencies in which a major segment - and the overwhelming majority - of the SBIR community would effectively be shut out of effective SBIR participation. These are those almost NINETY percent of firms whose technology is often important, but whose smaller market opportunity precludes any possible VC interest BUT also includes those younger and smaller firms who may well get to the point of addressing the large markets that VC involvement demands ... but which are not there yet. The limited resources of VC are only marginally focused to seed capital and early stage investment.
- and which would drastically the number of awards that can be made in any year and projects which can be supported over time.
Importantly, the Markey-Tsongas amendment to H.R. 2965 would have the citical effect of bringing the House version of SBIR reauthorization far closer to the provisions of the Senate SBIR Reauthorization bill S.1233. In these circumstances, a Conference Committee can be convened - and SBIR reauthorization can finally happen.
The SBIR Community in all its variation - awardees, State support organizations. professional service providers, friends and collaborators in large and mid-sized firms and associated Trade Associations and Professional Organizations are encouraged to get involved. Encourage Members with whom you have contact
- to sign the Markey-Tsongas Dear Colleague Letter
- to encourage the House Rules Committee to to make sure the Markey amendment is accepted as "in Order" and to permit an Open Rule such that others can offer amendments
- and/or be ready to vote for the Markey-Tsongas amendment
This is down to One Vote at a time
... every vote counts and we need every one. |
| Down to the wire |
 H.R. 2965 Decision Timetable
Rules Committee: Any and all proposed amendments to House Small Business Committee (SBC) SBIR Reauthorization bill - H.R. 2965 MUST be delivered to the Rules Committee by 10 AM on Tuesday, July 7, 2009 Link below describes what that involves:
http://rules.house.gov/announcement_details.aspx?NewsID=4347It is anticipated that H.R. 2965 will be brought to the Floor for full debate and vote shortly thereafter. If last year?s tight schedule is any indicator, that may be as early as July 8, 2009 |
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| Two versions of SBIR Legislation Reauthorization |
House
H.R. 2965 - To amend the Small Business Act with respect to the Small Business Innova-tion Research Program and the Small Business Technology Transfer Program, and for other purposes. - June 19, 2009
Senate
S.1233 - To reauthorize and improve the SBIR and STTR programs, and for other purposes. - June 10, 2009
- June 18, 2009: S 1223 was marked up and reported out of the Senate.
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| Recent SBIR- related Hearings |
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Field Hearing - Missed Opportunities - The NIH/SBIR Exclusion in the Recovery Act - June 22, 2009
Markup of SBA Reauthorization Bills - June 18, 2009
House Committee on Small Business - Legislative Initiatives to Strengthen and Modernize the SBIR and STTR Programs - June 17, 2009
Subcommittee on Contracting and Technology - Legislative Initiatives to Strengthen and Modernize the SBIR and STTR Programs - June 4, 2009
Roundtable on Small Business Research and Development - June 4, 2009
Subcommittee on Technology & Innovation - The Role of the SBIR and STTR Programs in Stimulating Innovation at Small High-Tech Businesses - April 23, 2009
House Committee on Small Business - "The Importance of Technology in an Economic Recovery" - April 22, 2009
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Opening up the debate:
Seriously concerned about the continued effective operations of SBIR at a time
- when it seems that program continuance has been all but relegated to a series of temporary life-support system efforts -- an uncertain status which cannot help but be disruptive to awardees, applicants and Program Managers alike in how they plan to future operations
- when there has never been a more important national need for the entirity of the SBIR community in all its variations to be put to work
a number of Members in the House, fully aware of the demonstrated achievement of the SBIR community, have reached the conclusion that it is time to take decisive action. To break the current log-jam that has stalled effective legislative action on this vitally important program for now years, and get to serious consideration of, and decision on Reauthorization, there is urgent need to Open Up the Debate.
Dear Colleague Letter
Fully cognizant of the vital role of technology-based small firms as major contributers to the health of an industrialized economy, these Members judge that the time is NOW to have the important, wide-ranging - and open - conversations about not only about simply reauthorizing a program that have been proven to work on many levels, but how to ensure the continuing relevance and effectiveness of SBIR to the conditions in which business is now done.
It is important to stress that this Open Debate approach is explicilty NOT designed to exclude ANY segment of the SBIR community from effective SBIR involvement. Instead the effort is to address eligibilty issues such as to ensure continuing access to the critical resources that are SBIR dollars and technology validation to as broad a swath of technology developing small firms as possible.
To that end, these Representatives have crafted a Dear Colleague Letter which they are requesting as many of their fellow Members as possible with similar high-regard for the value of the SBIR program to sign. Objective: to enable those conversations to be initiated and
to engage as many of those affected as possible.
The To-Do List for all Awardees and Program
Supporters for whom SBIR-STTR is Important:
 Task ONE: You are encouraged to contact your Member - email or call asap - asking them to consider putting their signature to that Letter.
The request is that that be done not later than April 3, 2009: The effort is to complete as much of this signature-gathering process as possible before Congress adjourns for their Spring Recess (April 6). This will allow work on set-up of these conversations - private meetings, working sessions, hearings etc - which can then begin soon after Congress reconvenes.
Task TWO: As a community, SBIR has limited Washington presence and can never expect to compete against the millions of dollars that others have already spent to try to impose their version of SBIR. However, one of the major strengths of SBIR as a political contituency is an impressive and substantial grassroots presence. - You live, work and VOTE in the district
- and, perhaps even more important, most of you are doing really interesting things and have compelling stories to tell.
Playing to this strength, request time with the Member to talk to them while they're home about what you do.
- Meet with him/her in their District Office - and don't discount the value (if it is the only available option) of session(s) with staff in the DC office or in the District. These persons have more time to spend with you and can be powerful messengers
- If your facilities are interesting, invite them to visit. Give the guided tour. From considerable experience I can tell you that the excitement and energy that many of you convey when you talk about what you do is powerful and infectious. What you can show them will quickly outshine what any lobbyist can tell them
- If there are scheduled Town Meetings by Members during the Spring Break, plan to be there and be ready to ask a question
- Arrange for a group of several of the local SBIR awardes and supporters to meet with working session to discuss what you're all doing and how valuable SBIR has been in that effort. We can help you identify everyone else nearby.
Our databases are set up to drill down to the extent and form of SBIR-involvement at the particular Congressional District level. If you think that that type of data would be useful, we can probably help you.
Task THREE: As a companion effort and from the same premises - that you have interesting stories to tell - try to get media coverage. This can be print or electronic - but it is powerful. The VC community have done a very effective - but largely one-sided - job of getting the SBIR-VC eligibility story major coverage. A more complete discussion of the issues and how they can be resolved to enable as broad a community of technology-based small firms would be far more appropriate.
A total of 6253 small firms nationwide
are currently SBIR-STTR active
- of which only 705 are VC funded. |
Until recently, Congress had been hearing primarily from those apparently speaking for that 705 - but, we would suggest, not really.
In a politically astute and very well-crafted strategy, those trying radically to change what SBIR is about have framed the argument as one effectively pitting
- SBIR awardees working in space that is not high-growth and never likely to be of interest to the formal investment community
- against those with such funding and/or hoping to secure such funding at a later point.
Strikingly, however, almost all of the firms in this second grouping that have been talked about are those with VC usually in quite small dollar amounts and primarily in states with limited access to equit financing
Almost nothing has been heard about the firms with much larger VC involvement. They have not been the featured firms in published articles and most Congressional discussion.With rare exeption, they have not been the firms which have been ruled SBIR ineligible.
Perhaps even more telling is the fact that there has been little or no discussion of why SBIR support has become so vital to these larger, later-stage development, higher-growth firms. Ironically, on that point, they have properly flagged a problem in the SBIR context that is serious and justifies careful consideration but which has not, to my knowledge, been discussed at all. I would be inclined to argue that their mistake has been not to understand that the problem they have flagged - Phase II to Phase III transition in all its variations - is not a pecularity of high growth VC funded firms but symptomatic of all technology-based endeavor - and an isue of consequence as we move to the next generation of SBIR activity. |
These are among the issues
which need to be part of the Open Debate
for which concerned Members are calling.On which ever 'side' you have previously stood, I would suggest that these have to be issues of concern to you too. | |
Painted into a corner:
The zero-sum game approach which has entirely defined reauthorization to this point has been highly, and unnecessarily, divisive and destructive ... and a costly diversion when we can afford it least.
At a minimum. it has cut off useful discussion about reauthorization and has held hostage and complete limbo an enormously important and effective program. There are other ways to address the issues that the VC ccommnity have raised But even more critically, this approach and the associated stubborness even to consider those alternatives has also precluded discussion of issues of consequence. |
Setting this in context::
SBIR has always been controversial.
At the beginning there was major push-back from the research community who saw the SBIR percentage against R&D funding as taking away from their available pool. The implicit assumption was that small firms would not be doing quality work.
There was reluctance in the agencies to assume the perceived burden of managing the large numbers of incoming applications from what, especially early on, were from players inexperienced in the federal space.
Every reauthorization brought its own challenges and there have been many occasions in between when there has been need to weigh into the political fray. It has not been pretty.
But even against this background and track record, this time has been different.
This fourth SBIR Reauthorization has deteriorated into a complex, nuanced and, frankly, sometimes downright nasty situation that has (inappropriately) radically split the community like nothing any of us have ever previously seen.
The need is for the community to stop allowing others to speak for you -- and for you to be speaking up for yourselves and - perhaps even more important - to each other about how most effectively to move forward
Some interesting and probably relevant data:
Some 50% of all currently VC funded firms in SBIR have less than $10M of equity participation - a lot of money for those which don't have it, but not a lot in the VC world.
If one increases the VC dollar participation to $25M, the percentage among currently SBIR-active firms is more than 70% of
Strikingly, it is these smaller VC dollar firms which have
invariably been those in the featured articles and Congressional testimony
are largely in states which typically do not do well either in the SBIR OR, even more importantly, in having access to VC support.
are consistently seeking equity financing earlier in their development and
are paying more than more experienced firms when (and if) they get that funding and signficantly more than firms in states which have more equity participation options.
Why have these discrepancies not been the subject of discussion?
Let us underscore:
Reauthorization is NOT about exclusion of any segment of the small business community. It is about ensuring that by criteria grounded fundamentally in technology competence, small firms in all their diversity and stage-of-development continue to be supported towards the honing of their skills and competencies with all the economic impact implications that enables. Even more critically, it is about enhancing the SBIR effort to support a more consistent and effective drawdown of the substantial value that SBIR has created.
The world is a fundamentally different place from what is was when SBIR was originally crafted and yet, in many ways, the SBIR program effort continues to be managed in the same way it has always been and as if it is some sort of a closed system.
The political focus needs directly to address the fact that the SBIR community in all its diversity and with all its in-place tie-in the the economy as a whole is a key element in the overall health of the technology development condition - and that to deliver on the promise made and in part already fulfilled, the program is broad enough to include as many as possible - not to engage the capabiliites of a few to the exclusion of the many.
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