Businesses Partially Owned by Venture Capital Firms, Hedge Funds and Private Equity Firms Now Eligible for SBIR Program

February 18, 2013 at 10:40 pm Leave a comment

Summary
The Small Business Association (SBA) recently amended regulations governing eligibility for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to permit, in certain circumstances, businesses majority-owned by multiple domestic venture capital operating companies, hedge funds or private equity firms (investment funds) to participate in the SBIR program if no one investment fund owns 50 percent or more of the business.

The investment funds must have a place of business within the United States and be organized under United States laws. In order to be eligible for an SBIR grant, a business concern that is owned by multiple investment funds must be registered with the SBA when it submits its initial proposal to an SBIR solicitation or announcement.

Why This Matters
The new rule does not change the requirement that an applicant certify its size and eligibility at the time of award only. However, if an awardee is acquired during the performance of an SBIR or STTR funding agreement, it will be required to recertify its size status before the SBA may extend the grant.

Read the full pdf-version, Businesses Partially Owned by Venture Capital, Hedge Fund and Private Equity Firms Now Eligible for SBIR Program.

If you have any questions regarding this summary, contact any of Stinson’s Corporate Finance attorneys.

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