Hopes and Cures

Getting financing can be difficult. This news article from the Worcester Telegram & Gazette demonstrates the importance of SBIR funding.

“Not all start-up companies have been able to tap into venture capital to fund their businesses. Mr. Prescott of Crescent Innovations has secured federal Small Business Innovation Research funding, grants and money from individual “angel” investors to finance research. He has hired researchers on a contract basis as needed and used young interns to help. The company is based within ECI Biotech of Worcester.”

This article describes the complex nature of financing medical innovations and the key role SBIR plays. SBIR provides seed money for the early stage research that is deemed to high risk for most venture capital markets. In addition, the rules of ineligibility are such that even monies received by angel investors could alter whether or not a company is not majority owned by ‘individuals’ and thus deemed ineligible. It is clear these are small companies and the government funds are not the basis for a business model but rather the initial seed money that helps develop an idea with potential and provide scientific validation that will serve to attract more private sector interest – i.e. traversing the valley of death and moving towards making the therapy/treatment available to the public. It seems ironic that by attracting venture capital a small business can be deemed ineligible instead of a good investment by the government.