WASHINGTON – U.S. Senators Chris Coons (D-Del.), Cory Gardner (R-CO), and Kirsten Gillibrand (D-NY) today introduced the Support Startup Businesses Act, which would create a pilot program that allows awardees of federal research and development grants to use a portion of that funding to create a startup business.  

Specifically, the bill authorizes Small Business Innovation Research (SBIR) program awardees to allocate up to 5 percent of their awards for activities that are critical to building businesses, including services such as market validation, intellectual property protection, market research, and business model development. Currently, the SBIR program only offers very limited financial support to awardees for commercialization activities. 

“Startups are the engine of job creation in the U.S., but the rate of startup creation is well below historical norms,” said Senator Coons.  “This commonsense bill will provide our world-class scientists and engineers with the support they need to translate their cutting-edge research into new startup companies that fuel economic growth.” 

Entrepreneurs face many challenges when it comes to building a viable small business,” said Senator Gardner. “Given that startups are the foundation of our local economies and support nearly all new net job creation throughout the country, it’s essential that we make it easier for them to succeed. The Support Startup Businesses Act recognizes that by creating a pilot program to help startups bring their innovations to market and create American jobs.”

“If we want our economy to grow and create more jobs, we need to give entrepreneurs the support to turn their innovative ideas into successful business opportunities,” said Senator Gillibrand. “The Support Startup Businesses Act will provide critical access to much-needed gap funding for entrepreneurs and small businesses to bring their innovations to market, and ensure that new technologies are made here in America, creating the next high-tech industry and a new generation of innovative leaders who are critical to the future of our economy.”

"ITIF applauds Senator Coons, Senator Gardner, and Senator Gillibrand for their leadership on behalf of America’s innovative scientists and engineers. With this legislation, budding startups getting their start in part through federal R&D funding will be better equipped to tackle the challenging task of turning research discoveries into the successful new businesses which are so vital to economic growth and our nation’s position as a global leader in innovation.  We encourage Congress to enact this bipartisan proposal," said Dr. Robert D. Atkinson, President, ITIF.

Coordinated by the Small Business Administration, the SBIR program is one of the premier federal programs for fostering innovation.  Through a competitive awards-based program, SBIR encourages domestic small businesses to explore their technological potential by engaging in R&D that has the potential for commercialization. 

The Support Startup Businesses Act would:

  • Establish a temporary pilot program that allows SBIR awardees to use a small portion of their grants for startup-related commercialization activities.
  • Require annual reporting by awardees on startup-related commercialization activities and a review of the pilot program upon completion.  

The bill authorizes the use of existing resources, so the pilot program will not increase overall program spending. 

The bill has been endorsed by the Information Technology and Innovation Foundation; State Science & Technology Institute; National Council of Entrepreneurial Tech Transfer; Innovation Center of the Rockies; University City Science Center; University of Delaware; Innosphere; Delaware Small Business Development Center; University of Delaware Office of Economic Innovation and Partnerships; Delaware BioScience Association; Launch NY; and Georgia Research Alliance.