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February 14, 2021 | Tom Ballard

State matching funds for federal SBIR and STTR grants not restored in proposed 2021-22 budget

Founders of tech-based start-ups in Tennessee were disappointed to learn a popular program that matched successful federal grants was not restored in Governor Bill Lee’s 2021-22 budget proposal released last week.

The program that provided matching funds for recipients of Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants had been eliminated in the 2020-21 budget when the Governor and General Assembly made deep cuts in anticipation of sharply reduced revenues due to COVID-19.

Described as “America’s Seed Fund,” the federal dollars are non-diluted investments in tech-based companies, and the State of Tennessee matching program provided additional funds that could be used for activities like marketing that are unallowable under the federal guidelines.

Many had expected the dollars to be restored, at least as non-recurring funding and hopefully as recurring dollars, meaning year-after-year. That did not happen.

“We are certainly disappointed that we are not currently included in the Governor’s first budget,” said Abby Trotter, Executive Director of Launch Tennessee. Ironically, she was recently recognized by the U.S. Small Business Administration with a “Tibbetts Award” for her work championing the two programs (see recent article here).

“We are going to do everything we can to ensure that the funding is in the final budget passed later this session,” Trotter said. “If Tennessee is serious about commercializing our best technologies from our world-renowned research institutions and keeping top scientific and research talent in Tennessee, then leveraging federal SBIR/STTR dollars is unquestionably one of the best ways to do it. States that match SBIR/STTR dollars show a commitment to building the STEM workforce – and they receive more federal money. The return back to the state from this small investment that supports scientific entrepreneurs is unarguable. We look forward to making this case to the administration and legislature over the next several weeks.”

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