SBIR Overhaul Stalls In the Senate, to the Detriment of VC-Backed Innovation


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rejects this provision but would give VC-backed firms access to only 25 percent of the award dollars from three federal agencies, including the National Science Foundation, and to 15 percent from eight others.

So despite movement in the House, entrepreneurs who have been able to attract venture capital in the competitive marketplace of ideas are still being penalized. This is ridiculous. All entrepreneurs should be able to compete on an equal footing for capital. The only parameter should be which put forth the best ideas. The loser in this game of political football is not any particular startup but U.S. innovation in general.

The latest flap in Congress is hardly the only example of government missing the big picture. The U.S. still makes it far too difficult for gifted foreign entrepreneurs to stay in the country, which forces them to return to their home countries to form competing startups. A green card should be stapled to every advanced degree awarded by leading U.S. universities in science, engineering and mathematics. And then there is Sarbanes-Oxley, which burdens small entrepreneurial businesses with the same regulatory and statutory burdens that are applied to multi-billion-dollar enterprises, costing them millions of dollars annually in additional fees they cannot afford.

The U.S. government must view the global economy as it really exists and realize that the twin pillars of innovation—talent and capital—are the two most portable assets in the world, poised to move to whatever environment embraces and rewards them. U.S. venture capital inflows have improved, but they would improve a lot more if an increasing amount of venture capital wasn’t leaving the U.S. for places like China and India.

Venture capital-backed startups have created the backbone of Silicon Valley and continue to do so. Technology giants such as Intel, Apple, Cisco, Google, and Facebook were all once obscure startups. We have to pull out all the stops to make sure this evolution doesn’t end.

Citizens need to call their congressmen and urge them to vote to level the playing field for entrepreneurs and allow VC-backed startups full access to SBIR program participation. To build the future, America must do everything possible to relentlessly out-innovate the rest of the world.

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Bob Ackerman Jr. Ackerman is the founder and a managing director of Allegis Capital, an early-stage Silicon Valley venture capital firm that invests heavily in cybersecurity. Follow @allegiscapital

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