SSTI Digest

In larger VC firms with more assets under management (AUM), women at all levels received pay in line with what men received, with the median total cash for female general partners above that of the men. However, women at smaller AUM firms received significantly less total cash compensation than men, particularly at the managing general partner level, according to a survey on professional compensation in venture capital firms conducted by First Republic Bank recently and J. Thelander Consulting, Inc.   Over half of survey participants said their firms have policies and programs in place to promote diversity in recruiting and career development.

The National Association of State Budget Officers’ (NASBO) Fall 2022 Fiscal Survey of States, released last month, reflects a more positive fiscal environment than last year and found that FY 2022 general fund spending grew a record breaking 18.3%, slightly higher than previous estimates, although when adjusted for inflation, spending grew at a rate of 9.6%. Alongside rising general fund expenditures, general fund revenue grew 14.5% to $1.17 trillion in FY 2022 (slightly lower than FY 2021’s 16.6% increase). Rainy day funds reached record highs, growing an additional 10.43% in FY 2022, from $121.8 to $134.5 billion, building off of FY 2021’s 58% increase over the prior year. The data used in NASBO’s Fiscal Survey of States was compiled through surveys of executive state budget officers between August and November 2022. As noted by NASBO, with some exceptions, FY 2021 data represents actual figures, FY 2022 preliminary actual (not all states have certified their 2022 actuals, or may still be relying on enacted budgets), and FY 2023 reflect a given states’ enacted budget. Comparing FY 2022 data to FY 2021 data reveals that on average, states increased general…

New fiscal year (FY) 2021 Higher Education Research & Development (HERD) survey data released by the National Science Foundation (NSF) reveals a $3.4 billion (4%) increase in research and development (R&D) spending by institutions of higher education ($86.5 to $89.9 billion), driven almost entirely by a decades high federal government R&D funding increase of $3 billion. The FY 2021 HERD is a survey of all 910 universities and colleges granting a bachelor’s degree or higher that also had R&D expenditures of at least $150,000 in FY 2020. Institutions that reported less than $1 million in R&D expenditures in the prior fiscal year were allowed to submit a “short-form” version of the survey; this made up 262 of the 910. While the 262 institutions were excluded from much of NSF’s provided tables and analyses, they only make up around $149 million – approximately 0.2% – of total higher-ed R&D expenditures. The HERD survey collects a variety of data that shows the diversity of R&D investments in higher-ed; by source of funding (see above figure), the federal government provides the most funding for higher-ed R&D activities, followed by…

SSTI has written a response to the U.S. Small Business Administration’s (SBA) proposed revisions to the Small Business Investment Company (SBIC) program, which aim to increase program participation. The proposed changes include reductions in licensing fees for first- and second-time funds, exceptions to the conflict of interest rules for follow-on financing, increasing access to credit for leveraged funds and a new “accrual debenture” option for SBICs. The SBIC program provides additional funds, in the form of “debentures,” that privately- and publicly-managed funds can use to provide capital to small businesses. Because the traditional debenture structure requires the SBIC immediately to begin making loan repayments to SBA, much of the financing provided by SBICs has been to relatively later-stage businesses. SBA’s proposed accrual debenture could make the SBIC program more relevant to early-stage business investment. This debenture would not require payment until the end of a 10-year term, with the possibility of a five-year, “roll-over” extension. This proposed rule change would remove the pressure for SBICs to produce immediate returns, thereby helping new…

Thirty-three states have been approved for at least one equity program through the State Small Business Credit Initiative (SSBCI) as of December 2022. The states are: Alaska, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Vermont, Virginia, West Virginia. SSBCI can fund a wide variety of programs that support small business capital access, including direct loans, loan guarantees or equity funds. In many cases, states looking to support new, technology-focused companies have proposed programs that facilitate equity investment. Broadly speaking, Treasury defines equity programs in two buckets: “Equity Capital Program (Funds)” as programs designed to make investments into one or more funds, which match the SSBCI funds with private capital and then invest in businesses, and “Equity Capital Programs (Direct)” as those in which the state or its administrator/contractor invests in a business (alongside private funds) without…

With the Dec. 20 release of two Requests for Information (RFIs), the White House Office of Science and Technology Policy seeks public input to help guide the development and deployment of the National Biotechnology and Biomanufacturing Initiative, which is intended to use the two disciplines to advance innovative solutions in health, climate change, energy, food security, agriculture, and supply chain resilience. The National Biotechnology and Biomanufacturing Initiative RFI seeks public responses on or before Jan. 20 to 17 specific questions contained within several broad topic areas: harnessing biotechnology and biomanufacturing R&D to further societal goals; data on the bioeconomy; building a vibrant domestic biomanufacturing ecosystem; biobased products procurement; biotechnology and biomanufacturing workforce; reducing risk by advancing biosafety and biosecurity; measuring the bioeconomy; and, international engagement. Public responses to the RFI for Identifying Ambiguities, Gaps, Inefficiencies, and Uncertainties in the Coordinated Framework for the Regulation of Biotechnology are due Feb. 3.  In it, OSTP seeks comments regarding,…

The U.S. Department of Commerce recently launched the Capital Readiness Program grant competition, which will provide $93.5 million to help minority and other underserved entrepreneurs grow and scale their businesses and be administered by the Minority Business Development Agency. The program will provide funding to incubators, accelerators and other eligible organizations to assist and train minority and other underserved entrepreneurs seeking resources, tools, and technical assistance to start or scale their businesses in high-growth industries such as healthcare, climate resilient technology, asset management, infrastructure, and more. MBDA’s Capital Readiness Program is funded by the Department of Treasury’s State Small Business Credit Initiative (SSBCI), and is intended to serve entrepreneurs and businesses that are applying, have applied, or plan to apply to SSBCI or other government programs that support small businesses. More information about the program is available here and MBDA will be hosting a series of three pre-application webinars beginning on Jan. 10 at 2 p.m. EST. Register here.

Seeking fundamental changes in access to and equity in science, technology, engineering, math and medicine (STEMM) education, the White House Office of Science and Technology Policy (OSTP) and participants from across sectors met and sought ways to ensure the STEMM ecosystem is equitable and inclusive. OSTP, along with the American Association for the Advancement of Science (AAAS), and with support from the Doris Duke Charitable Foundation (DDCF), have launched the STEMM Opportunity Alliance (SOA), a national initiative to lead and coordinate this and future cross-sector action to achieve equity across STEMM fields. To date, more than $4 million has been committed to launch SOA with more than 90 partners signing onto the effort. SOA outlined five key areas for action that will help bring about change and “ensure the diversity that is necessary for the increased performance and innovative ideas that are needed to keep the United States competitive.” They include: Foster a more just society by ensuring greater access to opportunities for economic prosperity; Coordinate a national effort across many sectors; Ensure scientific excellence; Maintain U.S.…

Federal innovation and entrepreneurship initiatives would receive substantial new funding under the text of the omnibus spending bill shared on the morning of Dec. 20 by the Senate Committee on Appropriations. The legislation, which totals $1.7 trillion and covers both regular FY 2023 appropriations and supplement funding, provides a total of $1.8 billion for programs authorized by this year’s CHIPS and Science Act and increases funding for multiple long-standing efforts — including each of the SSTI Innovation Advocacy Council’s priority programs. The legislation is expected to pass Congress this week, before the current funding agreement expires on Dec. 23. The SSTI Innovation Advocacy Council asked Congress for additional funding in FY 2023 for Regional Technology and Innovation Hubs (following its authorization in the CHIPS and Science Act), Build to Scale, FAST and Regional Innovation Clusters. The omnibus bill includes new or increased funding for each of the Council’s priority programs. A note on FY 2023 vs. supplemental funding: This year’s omnibus provides funding through both regular FY 2023 appropriations and through supplemental funding. In the short…

In a hearing this week, lawmakers expressed bipartisan support for EDA’s innovation programs and for providing appropriations for the newly-authorized Regional Innovation and Technology Hubs. On Dec. 14, the House Subcommittee on Research and Technology held a hearing on “Building Regional Innovation Economies.” This panel, convened by subcommittee Chairwoman Haley Stevens, emphasized the Economic Development Administration’s Build to Scale, Build Back Better Regional Challenge and newly-authorized Regional Technology and Innovation Hubs (Tech Hubs) programs. The witnesses, who included EDA administrator Alejandra Y. Castillo, spoke to the significant and positive impact EDA funding has had for local economies. This hearing was a follow-up to last summer’s session, in which SSTI president and CEO Dan Berglund testified, before the CHIPS and Science Act authorized Tech Hubs and before EDA made its Build Back Better Regional Challenge awards. During this week’s hearing, members of the science committee from both sides of the aisle seemed supportive of EDA’s role in encouraging regional innovation and interested in further funding for the agency. Chairwoman Stevens…

A recent report outlines over 100 initiatives that could boost the semiconductor industry. The Arizona Commerce Authority and Boston Consulting Group recently collaborated on a National Semiconductor Economic Roadmap (NSER) to advance semiconductor competitiveness in the United States. The report features input from over 80 industry leaders, education institutions, and public sector leaders across the nation to outline a 10-year, industry-led action plan for the semiconductor industry, focusing on infrastructure, supply chain, workforce, and entrepreneurship. The reliance on international partners within the semiconductor industry has created shortages in the U.S.'s aerospace, defense, and energy infrastructure, and shifts in domestic manufacturing capacity have weakened the nation's semiconductor industry. The success of the investment possible through the CHIPS and Science Act will rely on effective collaboration, which inspired the NSER. The roadmap states that with this investment, the U.S. could capture between 16-28% of global industry capital rather than a projected 8% and increase the U.S. share of global capacity to 11-16% in 2033 instead of 8%. The…

A recently released International Energy Agency (IEA) report states that renewables are set to account for over 90% of global electricity expansion over the next five years, with China retaining a 75-90% share in global renewable manufacturing capacity. China has released its 14th 5-year plan and is expected to account for almost half of the new global renewable power capacity additions over the 2022-2027 period. Meanwhile, the US Inflation Reduction Act has provided new support and long-term visibility for the expansion of renewables in the United States. Because of the war in Ukraine, many European governments and businesses are looking to rapidly replace Russian gas with alternatives. And according to the IEA, the amount of renewable power capacity added in Europe in the 2022-27 period is forecast to be twice as high as in the previous five-year period. Additionally, India’s biofuel demand and production are projected to increase 70% over 2022- 2027, thanks primarily to its goal of reaching 20% percent ethanol blending by 2025 and rising gasoline demand. If countries maintain trade policies that limit imports and favor domestically produced photovoltaic…