Phase II rather than just Phase I—so a focus on the latter includes almost all commercial successes.

The focus on 1992-2002 coincides with the rapid development and maturation of the biotechnology industry. It also reflects the reauthorization of the program in 1992, which led to prioritization of the legislative goals of SBIR with an emphasis on commercialization. Finally, and not least, the focus on data from 1992 to 2002 is driven by the availability of data.

The firms winning Phase II awards also constitute the universe of firms addressed by the NRC’s Phase II Survey,2 and the NIH Phase II Survey,3 which provide the best available data on outcomes from the SBIR program. These data will be critical to the second phase of the analysis, identifying impacts.

The standard database on venture funding—also used by GAO in its 2006 study4—is the Thomson VentureSource database, and this is the primary source of venture funding data utilized in this National Research Council study.5 The NRC compiled a list of firms that received at least one Phase II award at NIH between 1992 and 2002 inclusive and Thomson VentureSource ran that list against its own database of firms that had received venture funding as of the end of 2006.

Because VentureSource requires that firms be identified based on company name, a process was developed to broaden the net, identifying all firms that could conceivably be matched to firms in the NIH awards database (using wildcards in the database search6). These possible matches were then tested manually against known company addresses to eliminate false positives from the results dataset.7

The final list from VentureSource provides considerable detail on venture capital investments: It indicates the name of the company, the date of the round of funding, the type of funding, and the amount.8 This appears to be the most

2

For details on the NRC Phase II Survey, which included at least one questionnaire to every Phase II winner 1992-2002 inclusive, see National Research Council, An Assessment of the SBIR Program at the National Institutes of Health, Charles W. Wessner, ed., Washington, DC: The National Academies Press, 2009.

3

For details on the methodology and scope of the NIH Phase II Survey, see National Institutes of Health, National Survey to Evaluate the NIH SBIR Program: Final Report, July 2003, available at <http://grants.nih.gov/grants/funding/sbir.htm>.

4

U.S. Government Accountability Office, Small Business Innovation Research: Information on Awards Made by NIH and DoD in Fiscal Years 2002 through 2004, GAO-06-565, Washington, DC: U.S. Government Accountability Office, April 2006.

5

A secondary database owned by <Inknowvation.com> was also used by GAO but was not made available to the NRC.

6

We supplied a list of firm names; VentureSource replaced part of the name with wildcards and then searched the database.

7

The VentureSource search results included information on the city and state of the firm, and these data were cross-checked against city and state data from the SBIR awards database.

8

“Type of funding” refers to terminology within the venture capital community. Thomson and others distinguish between seed funding, A round funding, B round funding and C round funding.



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