How Federal Agency Freezes Could Affect Innovative Small Business

This week reported the EPA and USDA were instructed to freeze external communications and put a halt on all grant programs.

Many small, innovative technology companies use these federal grants as a way to fund research and get the business side of technological development on its feet. This freeze could mean a new era for how small businesses, especially those funded through programs like SBIR, Small Business Innovative Research and STTR, Small Business Technology Transfer, receive their seed funding.

For companies who rely on funding through federal grants programs the freeze could mean a halt in millions of dollars that are used to fulfill payroll, research, and development for products of the future. The unintended consequences of this action leaves behind thousands of small businesses whose growth and contribution to the job market will be affected along with the emerging technologies they represent that will help solve problems of sustainability, climate change, agriculture, medical advances, and education needs.

According to a USDA program director, investors often meet these small businesses or inventors at early stage, where they see great opportunity alongside substantial risk. Investors are typically unwilling to invest when a company is not trained or matured with a business plan, IP and commercialization strategy. SBIR and STTR helps mitigate risks for future investors by outline essential foundational building blocks of any company.

The SBIR programs through EPA, NSF, USDA and other agencies provide seed funding for ingenuity, but also the rigor and structure in the application and award process to ensure that each and every business recognizes market needs, business, and commercialization prerequisites. Businesses funded through these programs tend to be leaders in innovation, and bring new technology to life but also expand the job market in America.

Federal funding like SBIR grants including the proposal framework itself imbues a vetted distinction, mitigates risk, and offers a winning scenario for the business, investors, and aids in job creation across the U.S.

This model is tried and true across many past administrations and has generated SBIR businesses who have demonstrated significant commercial success and societal impact as a result of their SBIR awards. These companies have created new jobs and products ranging from classroom teaching tools such as Sokikom, to wireless technology like Qualcomm.

Small business owners are adaptable, and as we observe the new landscape forming it’s becoming clear that we need to raise important questions on how to navigate the future of funding. As new agency initiatives launch we anticipate, learn, and adapt to align milestones, goals, and commercialization strategies. In the interim, we should be aware of what state resources are available right now and how green and sustainable programs gain traction at the state and local level.

Greg Tudryn