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Bill would change rules for business research grants

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WASHINGTON – U.S. Sen. Chris Coons, along with senators Cory Gardner (R-CO), and Kirsten Gillibrand (D-NY) last week introduced the Support Startup Businesses Act, which would create a pilot program that allows awardees of federal research and development grants to use a portion of that funding to create a startup business.

Specifically, the bill authorizes Small Business Innovation Research (SBIR) program awardees to allocate up to 5 percent of their awards for activities that are critical to building businesses, including services such as market validation, intellectual property protection, market research, and business model development. Currently, the SBIR program only offers very limited financial support to awardees for commercialization activities.

“Startups are the engine of job creation in the U.S., but the rate of startup creation is well below historical norms,” said Sen. Coons. “This commonsense bill will provide our world-class scientists and engineers with the support they need to translate their cutting-edge research into new startup companies that fuel economic growth.”

Coordinated by the Small Business Administration, the SBIR program is one of the premier federal programs for fostering innovation. Through a competitive awards-based program, SBIR encourages domestic small businesses to explore their technological potential by engaging in R&D that has the potential for commercialization.

The Support Startup Businesses Act would:

  • Establish a temporary pilot program that allows SBIR awardees to use a small portion of their grants for startup-related commercialization activities.
  • Require annual reporting by awardees on startup-related commercialization activities and a review of the pilot program upon completion.

The bill authorizes the use of existing resources, so the pilot program will not increase overall program spending.

Locally, the bill has been endorsed by the University of Delaware; Delaware Small Business Development Center; University of Delaware Office of Economic Innovation and Partnerships; and Delaware BioScience Association.

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