• Selection effects. It is likely that venture-funded firms will concentrate their efforts on projects that have a high potential for commercialization rather than projects with limited markets.

  • Multiple program objectives. This statistical analysis is primarily focused on commercialization, with a strong focus on sales. However, commercialization is only one of four primary objectives for the program. Other core objectives—including the dissemination of new knowledge, support for the NIH mission, and support in particular for women and minorities, are not easily amenable to this kind of statistical analysis. NIH chooses to support projects that vary widely in terms of their commercial potential, depending on weight placed on one or another of these objectives.2

  • Limited data. Our observations and conclusions are based on limited data. For instance, we have a relatively small sample of VC-funded SBIR firms. It is also difficult for us to determine whether we have random samples of VC-funded and non-VC-funded SBIR firms. While accurate and, the Committee believes, sufficient to justify the conclusions reached, they cannot provide definitive conclusions. By definition, these data limitations also limit the reach of our conclusions.

  • Varied time lags. The limited number of data points available do not make it possible to correct for different lags in the receipt of funding and of SBIR awards, though both undoubtedly affect the commercial outcomes that result. We have made one major adjustment, limiting the study period to 1992-2002, in part specifically in order to ensure that outcomes for more recent projects surveyed closely approximate those for older ones. However, differential lag effects still exist and necessarily bias commercialization outcomes against firms with a preponderance of more recent awards.

Bearing the limitations imposed by the points reviewed above in mind, we have accumulated data primarily from the 2002 NIH Phase II Recipient Survey (and updates through 2007) and the 2005 NRC Phase II Survey.3 Together, these generated 1,105 responses from 861 firms, allowing us to draw initial conclusions from an assessment of the different outcomes from projects implemented by venture-funded and non-venture-funded firms.


For assessment purposes, we divided the survey respondents into four pools:


Commercialization patterns of SBIR projects supported by venture-funded firms, compared to non-VC firms, may be affected by the possible propensity of venture capital firms to focus their efforts more strongly on areas where they identify substantial commercial returns.


These two sets of companies are not directly differentiated in the case of the NIH survey. In addition, only a relatively small number of responses come from ineligible companies.

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