. "2 Findings and Recommendations." An Assessment of the Small Business Innovation Research Program at the National Aeronautics and Space Administration. Washington, DC: The National Academies Press, 2009.
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An Assessment of the SBIR Program at the National Aeronautics and Space Administration
Fostering and encouraging participation by minority and disadvantaged persons in technological innovation. (See Finding E.)
The NASA SBIR program helps its award recipients achieve significantlevels of commercialization, as shown by the following metrics:
According to the NRC Phase II Survey, nearly half (46 percent) of NASA Phase II projects reach the marketplace and generate revenue.3
17.7 percent of projects generate revenues greater than $1 million.4
According to the NASA Commercial Metrics Survey, from 1983 to 1996, NASA SBIR projects created goods and services that generated over $2.3 billion in revenues in the private economy.5
Nearly half (46 percent) of all sales resulting from Phase II awards went to markets other than the federal government.6
Commercial success is concentrated.
For the NASA SBIR Phase II projects reporting sales greater than $0, average sales per project were $1,154,156. Commercial success is highly concentrated with about 40 percent of the total sales dollars resulting from two NASA projects that had $5,000,000 or more in sales. The highest cumulative sales figure reported was $15,000,000.7
This skewed pattern is also evident in private-sector early-stage finance.8
Phase III sales by NASA SBIR recipients appear to be roughly balanced between the private sector (47 percent) and the federal government (53 percent). (See Figure 2-1.)
See Table 4-1 on Percentage of Sales by Type of Customer.
See Figure 4-2 for the distribution of projects with sales greater than zero dollars.
See John H. Cochrane, “The Risk and Return of Venture Capital,” Journal of Financial Economics, 75(1):3-52, 2005. Drawing on the VentureOne database Cochrane plots a histogram of net venture capital returns on investments that “shows an extraordinary skewness of returns. Most returns are modest, but there is a long right tail of extraordinary good returns. Fifteen percent of the firms that go public or are acquired give a return greater than 1,000 percent! It is also interesting how many modest returns there are. About 15 percent of returns are less than 0, and 35 percent are less than 100 percent. An IPO or acquisition is not a guarantee of a huge return. In fact, the modal or “most probable” outcome is about a 25 percent return.” See also Paul A. Gompers and Josh Lerner, “Risk and Reward in Private Equity Investments: The Challenge of Performance Assessment,” Journalof Private Equity, 1 (Winter 1977):5-12. Steven D. Carden and Olive Darragh, “A Halo for Angel Investors” The McKinsey Quarterly, 1, 2004, also show a similar skew in the distribution of returns for venture capital portfolios.