Contractors with outside investors can tap research funds set aside for small businesses, thanks to a new rule from the Small Business Administration, though an outcry from the small business community led to some restrictions.
First, some background. As reported in May, the SBA proposed allowing small businesses that are majority-owned by venture capital and private equity firms or hedge funds to particulate in two popular programs: the Small Business Innovation Research Program and the 1992 Small Business Technology Transfer Act. Those small business have not before qualified for these programs.
The Small Business Innovation Research program, or SBIR, was established to strengthen the role of small businesses in federally funded research and development. The Small Business Technology Transfer Act, knowns as STTR, requires federal agencies with R&D budgets of more than $1 billion per fiscal year to fund small businesses.
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