On December 27, 2012, the US Small Business Administration (SBA) published a final rule to amend regulations governing eligibility for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs and to implement provisions of the SBIR/STTR Reauthorization Act of 2011. The Reauthorization was included in the FY12 National Defense Authorization Act (NDAA), which reauthorized the SBIR Program for six years and now allows small firms that are majority-owned by venture capital operating companies (VCOCs), hedge funds, or private equity firms to compete for SBIR grants.

This advisory briefly summarizes the most important changes to the SBIR eligibility rules and discusses how investments in or acquisitions of SBIR-funded companies may be affected.