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Will SBA Be Kinder to VC Industry?

New SBA chief counsel for advocacy may open up grants to companies with VC investors, if confirmed.
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Winslow Sargeant's recent nomination to serve as the chief counsel for advocacy at the SBA has some analysts predicting a deepening of the pool of eligibility for the Small Business Innovation Research program.

If approved by the Senate, Sargeant, who is the current managing director of Madison, Wisconsin-based Venture Investors and former program manager of the SBIR program for electronics in the National Science Foundation, will be tasked with calling attention to any and all impacts that federal decisions could have on small business, as well as being the primary adviser to SBA Director Karen Gordon Mills.

Mills says Sargeant's history in the technology industry, where he has worked as a senior engineer at Lucent, AT&T Bell Labs and IBM, and in entrepreneurship–he co-founded semiconductor chip start-up Aanetcom–are just the kind of experience the SBA looks for.

"He knows exactly what we're talking about – starting and growing companies," she says.

The SBIR is up for reauthorization in July, and could sail through the congressional process on the wings of a National Academies study that called the program "sound in concept and effective in practice." Of course, that was before the 2002 directive that barred companies that are more than 51 percent venture capitalist-owned from participating. The National Academies now recommend that the program reevaluate its eligibility requirements.

Mills, an entrepreneur and a founder and managing director of New York-based Solera Capital, says that despite heavy attention to the venture-related involvements of Sargeant and herself, SBIR has always been a program directed, above all, at serving its namesake–small business–and will hear all possible resolutions to the issue.

Mills says the SBA certainly doesn't want big businesses "crowding out" small businesses, but also that it needs to avoid arbitrary exclusion.

"We do not want to exclude any businesses–that are the most promising and innovative businesses–by virtue of the fact that they have certain ownership structures," she says.




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