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Equity Financing Resources
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Posted On: Wednesday January 14th, 2004 at 12:00am EST
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SUMMARY
Venture capital has traditionally been available through
private sources. However, entrepreneurs
can access equity and equity-type financing vehicles through the Federal
government and financiers working collaboratively with government sponsored
programs. Each funding source has its own requirements.
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This
matrix provides general guidelines based on several
factors: use of funds, repayment terms, industry focus and other requirements.
The matrix reflects the Federal
government’s objectives to create jobs, encourage innovation and firm
formation, raise technology level of firms, transfer “locked up” technology
available in research institutions, and among other things to generate tax
revenues. Many of these programs are funded on a year to year basis, as such,
fund amounts are not available. Entrepreneurs are encouraged to call contact
listed referrals for program details.
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Federal Government - Equity Financing Products:
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| PROGRAM |
PURPOSE |
REQUIREMENTS & GENERAL INFORMATION |
| Small Business Innovation Research Program (SBIR) |
Provides up to $850,000 in early stage R & D funding directly to small technology companies. Funds allocated in two phases. |
Encourages small businesses to explore their technological potential and commercialization their products.
SBA coordinates the program but the R&D projects come from a consortium of 10 federal agencies.
Tailored to small firms (for profit) with less than 500 employees).
http://www.sba.gov/sbir/
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| Small Business Technology Transfer Program (STTR) |
Similar to SBIR program. Provides up to $600,000 in early stage R & D funding directly to small companies working jointly with researchers at universities and other research institutions.
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Federal R & D funding is awarded to small businesses and nonprofit research institution partners (universities and national laboratories) jointly. Combines strengths of both entities. High tech research efforts are transferred from laboratory to marketplace.
Five Federal agencies participate in program including: DOD, HHS, DOE, NAS and NSF.
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| Defense Advanced Research Projects Agency (DARPA) |
Wide latitude in funding. |
Supports federal programs established to ensure equality in federal procurement.
Encourages small firms to enter by subcontracting with large firms. |
| Advanced Technology Program (ATP) |
For early state investment in development of innovative technologies. |
ATP partners with companies of all sizes, universities and non-profits to take on greater technical challenges.
http://www.atp.nist.gov/atp/overview.htm
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| SBA Small Business Investment Company Program (SBIC) |
Early stage, expansion and later stage financing
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SBA invests in venture capital funds who in term invest in promising small businesses. Investments may be in form of equity or loan (issued as debt securities). Each V/C has its own requirement and industry specific.
Listing of SBICs can be accessed by state: http://www.sba.gov/Inv/
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| SBIR & STTR |
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