The Obama administration is considering how to spend $200 billion in leftover money from the TARP fund, which was used to aid failing banks. Some business groups say start-ups were passed over for stimulus money, and they could use a boost.
Small businesses may get some extra help from the federal government through the TARP fund. The fund was used to aid failing banks, and $50 billion of unused money may go to help small companies get loans. That’s welcome news to groups that say small businesses were overlooked in this year’s stimulus package.
Back in February, small business groups watched with disappointment as the president signed a stimulus bill giving billions of dollars to basic science research, but relatively little to start-up companies.
Barbara Schilberg is the CEO of BioAdvance, a non-profit group that funds new biotech companies.
Schilberg: There’s a fundamental assumption that if you have basic research you will have products. And that’s not really correct. It’s sort of an over simplification on how things actually work.
Schilberg says there’s a big need for early-stage investment money to help turn research into products. Otherwise, she says, discoveries will be stuck with no way out of the laboratory.
Jim Jaffe is the president of the National Association of Seed and Venture Funds, based in Philadelphia. He spoke from his cell phone on his way to meetings in Washington.
Jaffe: One of the things that we are doing is lobbying the government to have them put up money for seed funding. Seed funding is the money that is used in what is known as the valley of death.
That’s the stage when businesses need investments before they have a product to sell.
The Treasury Secretary has said the money could be used to for small business loans.
Michael Cleare is the executive director of the University of Pennsylvania’s Center for Technology Transfer. He says money for research and for business is greatly welcome, but there’s still a funding piece missing.
Cleare: I feel very strongly that unless the government follows up its investment in basic research with more investment in translational research, then it isn’t going to see the impact that it wants.
Translational research tests whether a discovery in the laboratory could be a viable enterprise. Cleare says it’s a necessary step between invention and production.