This report presents the NRC analysis of the effect of the Small Business Administration’s eligibility rules with regard to the majority-owned venture capital participation in the NIH SBIR program. Using data from SBIR awards made from fiscal years 1992 to 2002 and with specific attention to the challenges faced by firms in the biomedical field and employing a combination of surveys and case studies adapted from the Methodology developed as part of the current five-agency analysis,4 the NRC investigated the following questions:

  • Which NIH SBIR participating companies have been or are likely to be excluded from the program as a result of the 2002 rule change on venture capital company ownership?

  • What is the likely impact of the 2002 ruling had it been applied during the 1992-2002 timeframe and what is its probable current impact?

Key variables include the presence and amount of SBIR support, the receipt of venture capital funding or other outside funding, and output measures including those related to commercialization and knowledge generation.

This consensus report contains statistical analysis, case study findings, and also presents the NRC Committee’s findings and recommendations.


On behalf of the National Research Council, we express our appreciation and recognition for the insights, experiences, and perspectives made available by the participants of the overall study’s conferences and meetings, as well as survey respondents and case study interviewees who contributed to elements of this study. We are also very much in debt to officials from the leading departments and agencies. Among the many who provided assistance to this complex study, we are especially in debt to Jo Anne Goodnight, the Program Coordinator for the National Institutes of Health SBIR program, who was instrumental in facilitating this review of the impact of policy directive on the NIH SBIR program.

As the lead member of the Committee’s research staff, Dr. Robin Gaster deserves major recognition for his instrumental role in the research team’s preparation of this report. Sujai Shivakumar also merits thanks for his careful review, edits, analysis, and written contributions which were essential for the preparation of this report. Without their sustained efforts, amidst many other competing priorities, it would not have been possible to prepare this report.


National Research Council, An Assessment of the Small Business Innovation Research Program—Project Methodology, Washington, DC: The National Academies Press, 2004. Access at <>.

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