Small technology businesses are a leading source of economic growth and innovation, but they struggle to attract the funding they need before their products are market-ready. Conventional investors, including venture capitalists, don’t see the reward as worth the risk—partly because they lack the information to evaluate the risks well, and partly because they can only claim a small piece of the reward. Much of the benefit accrues to workers, consumers, and other innovators. Government bureaucracies, meanwhile, tend to focus their own resources on established firms and research universities.

In 1982, Congress created the Small Business Innovation & Research (SBIR) program to fill this funding gap. SBIR, known as “America’s Seed Fund,” directs a portion of federal R&D spending to small enterprises developing new technologies and has provided critical support to the major technological breakthroughs made by many of America’s most innovative companies.