From this base, we received a total of 386 responses, an 18.8 percent response rate.3 These results provide an additional basis for assessing relative importance of the venture capital exclusion among those not applying for further SBIR funding from NIH.

Of the 386 responses, 49 identified their firms as having received, in fact, further SBIR funding. This may be because the names of firm can change, or because of inaccuracies in the tracking databases. These responses were eliminated from our analysis. Also eliminated were 87 respondents who indicated that they had not applied during the 2003-2006 timeframe but that they still expected to apply again in the future. These firms were therefore not “excluded” for the program by rule. The remaining 269 responses—13.1 percent of the target population—provided valuable data.

These respondents were asked two key questions. First, they were asked to provide multiple-choice answers as to why their firms were no longer applying.

The survey data summarized in Table 5-1 indicate that the three most frequent reasons for not applying were drawn from the operation of the program itself. These are: the level of competition (which at one level is a very positive statement about the quality of the program4); concerns about selection mechanisms; and funding delays.5

Conversely, venture ownership was one of the three lowest-scoring options, along with foreign ownership, and the shift to public ownership of the company. Only 12 responses (1.8 percent of the total) indicated that the venture funding exclusion was one of their reasons for leaving the program.

This suggests that at least for the firms that responded to the survey, the impact of the ruling on non-participation has been very modest. The survey data generate a result that identifies excluded firms at a considerably lower rate than our direct analysis of eligibility in Chapter 3.

Because being excluded is itself a sufficient condition for non-participation, it also seemed possible that venture ownership would be an especially powerful reason for non-application among those who mentioned it at all, so we also asked


The response rates for the SBIR survey are high for a technology survey, especially given that this survey is targeted to small firms. Fledgling companies tend to have a very high attrition rate. See Vangelis Souitaris, “Technological Trajectories As Moderators of Firm-Level Determinants of Innovation,” Research Policy, 31:877-898, 2002. Also see Vangelis Souitaris, “Firm-Specific Competencies Determining Technological Innovation. A Survey in Greece,” R&D Management, 32(1)61-77, 2002. Finally, see Pilar Rodolfo Vargas, Zárate Salinas, and Luis Ángel Guerras, “Does the Technological Sourcing Decision Matter? Evidence From Spanish Panel Data,” R&D Management, 37(2):161-172, 2007.


It is also true that if success rates fall below a certain level, the incentive for firms to apply diminishes as well.


These concerns are discussed in 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.

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