Monday, August 01, 2005


Mo. legislators and Chlorogen push to change SBIR rules

If you are an avid reader of this blog (and there may be about 5 of you out there now, a 500% gain from a month or so ago), then you will remember the topic of the SBIR changing their rules regarding eligibility for their grants. If a company was more than 50% backed by venture capital, then they would not be eligible for these grants. Here is a link to a San Diego Tribune article that reviews the whole story. This rule change apparently has had effects in the PMP world as outlined in this St. Louis Business Journal article. Legislative representatives from Missouri and David Duncan, CEO of Chlorogen traveled to Washington to lobby on behalf of "Save America's Biotechnology Innovative Research Act of 2005". A bill that would reverse these rules. Duncan goes on to say that their company has had to cut some programs due to these changes. In my opinion, there probably are some venture capital-back companies out there that abuse the SBIR system. However, I think many small biotech companies are going to be hurt if the current rules stay in place. A possible resolution would be to suggest that companies with a certain amount (not a certain percentage) of capital invested by venture capitalists should be excluded. Of course a million dollars goes a lot farther in some other industries than biotech so once again, a biotech company would have an arguement that are at an unfair disadvantage when compared to other industries. On a side note, there were no weekend posts here as I had the opportunity to travel back home to Kentucky this weekend. Got to see lots of friends and family and catch up on all the latest gossip.

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