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Equity Financing Resources
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Posted On: Friday March 27th, 2009 at 1:00pm EDT
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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.
Federal Government - Equity Financing Products:
Program: Small Business Innovation Research Program (SBIR)
Purpose: Provides up to $850,000 in early stage R & D funding directly to small technology companies. Funds allocated in two phases.
Requirements & General Information:
- 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/aboutsba/sbaprograms/sbir/index.html
Program: Small Business Technology Transfer Program (STTR)
Purpose: 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.
Requirements & General Information:
- 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.
Program: Defense Advanced Research Projects Agency (DARPA)
Purpose: Wide latitude in funding.
Requirements & General Information:
- Supports federal programs established to ensure equality in federal procurement.
- Encourages small firms to enter by subcontracting with large firms.
Program: Advanced Technology Program (ATP)
Purpose: For early state investment in development of innovative technologies.
Requirements & General Information:
Program: SBA Small Business Investment Company Program (SBIC)
Purpose: Early stage, expansion and later stage financing
Requirements & General Information:
- 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/aboutsba/sbaprograms/inv/index.html
| SBIR Federal Agency Program Links |
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