SmallBusinessNewz

I saw about four minutes of sumo wrestling the other day, and in one match, a competitor appeared to outweigh his opponent by at least 125 pounds.  Surprisingly, the little guy won.  But the bigger man certainly appeared to have an advantage, and small businesses may soon find themselves fighting more powerful ones for government grants.

David Robinson and Amy Haimerl report, "Today, by law, 11 federal agencies earmark 2.5% of their R&D budgets for grants meant to encourage innovation among small businesses.  Qualifying companies must have no more than 500 employees . . ."

However, "VCs believe their portfolio companies should qualify in all phases.  They are lobbying to end the rule by which the SBA counts all employees of any company 'affiliated' with the applicant - including the VC firm and other startups in its portfolio - toward the 500-person limit."

This could greatly increase the number of companies competing for any particular grant, and VC-backed businesses would almost always have a financial edge.  Compounding the problem is the way in which money might dry up in a recession.

It might be a good idea to think about this issue when voting in the next round of local or national elections.