Small Business Leaders Give Pryor Input On Grant Programs
Friday, Aug 22, 2008
By Jason Wiest
Arkansas News Bureau
LITTLE ROCK - Small business leaders on Thursday asked U.S. Sen. Mark Pryor, D-Ark., to exclude firms backed by venture capital from two federal programs due for reauthorization that award grants and contracts to small businesses.
The federal Small Business Innovation Research program is set to expire Sept. 30 and the Small Business Technology Transfer program next year. The House and Senate currently have different reauthorization bills.
"The House bill would be pretty disastrous to the things that are going on in Arkansas related to business development through SBIRs," said Calvin Goforth, president of Fayetteville-based Virtual Incubation Co., which develops new companies by partnering technology entrepreneurs with business experts, technology experts and seed stage investors.
The two bills have many differences, including the programs' length of extension, allocation methods and the amount of money available at different phases.
The difference that most concerned business leaders was a provision in the House bill that would open the SBIR to firms funded by venture capital.
"(That) I think is problematic for the country as a whole, but I think it's even more problematic in a state like Arkansas where there's very little venture capital funding available," Goforth said.
Others echoed the concern, including Sharon Ballard, president of Alma-based Enable Ventures, who told Pryor doing so would create a "capital risk reduction program" for organizations that can afford the risk.
"I have my marching orders," Pryor, who serves on the Senate Committee on Small Business and Entrepreneurship, said during the meeting at the University of Arkansas at Little Rock.
In fiscal 2007, 15 SBIR awards went to Arkansas companies, according to the State Science and Technology Authority. Some of the winners were present for the roundtable discussion hosted by the Arkansas Small Business Development Center.
Every year, SBIR and STTR provide more than $2 billion in federal grants and contracts to small business owners. They provide capital to develop technology and ideas into products and businesses that are normally deemed too risky for venture capital, said John Ahlen, president of the Arkansas Science and Technology Authority.
"The SBIR program and a little bit of seed capital investment from the state through ASTA, that's all the high risk capital that's available in this state," Ahlen said. "This is the lynch pin of commercialization in our state."
