Health Science Center awarded $2 million to spur growth
Published on December 15, 2022
The University of North Texas Health Science Center received a $2 million grant from Tarrant County to help emerging technology companies be successful when applying for federal Small Business Innovation Research funding.
The grant is part of Tarrant County’s State and Local Fiscal Recovery Fund program authorized by the American Recovery Plan Act, and was announced Tuesday morning during a Tarrant County Commissioners Court meeting.
What to expect: The grant will fund the HSC Next SBIR Phase 0 Program, which will provide guidance for Tarrant County small businesses in every step of applying for federal Small Business Innovation Research funding, also known as America’s Seed Fund.
“With this program, we hope to increase SBIR participation by Tarrant County small businesses and make their proposals more competitive,” said Dr. Robert McClain, the university’s associate vice president in the Division of Research and Innovation.
Why it matters: “An SBIR award can be transformative for an emerging technology company. The funds are nondilutive, meaning the company doesn’t have to give up any equity for the investment. And, because the SBIR process is highly selective and decisions are made by subject matter experts, the awards are often viewed by private investors as a validation of the company’s innovation.”
“It’s about creating entrepreneurial excellence in Tarrant County,” said Roy Brooks, Tarrant County Precinct 1 commissioner. “This puts us at the forefront of innovation in bringing tech industries to Tarrant County as an economic development tool.”
The importance and impact of SBIR grants
The SBIR program provides approximately $3.7 billion a year in funding to small businesses, making it the country’s largest single source of nondilutive, early stage funding. Eleven federal agencies operate SBIR programs, funded through a mandated 3.2% allocation of their research budgets. The funding occurs in two phases, with phase two grant amounts typically being much higher than phase one awards.
High returns: A recent study of the Department of Defense SBIR program found that the $14 billion in SBIR awards made to small businesses between 1995 and 2012 had a total economic impact of $347 billion through 2018. This impact included almost $3 billion in new tax revenues and the creation of 1.5 million jobs with an average annual compensation of $73,461.
Small businesses are responsible for two of every three jobs created over the past 25 years, according to the Labor Department, making them the most significant economic driver in the country.
The local angle: However, SBIR funding is drastically underutilized in Tarrant County, relative to other Texas regions, and a new program through HSC Next aims to change that.
SBIR Phrase 0
The HSC Next SBIR Phase 0 program will significantly expand Tarrant County’s participation in SBIR programs at a time when small businesses are desperate for funding to stimulate innovation and growth.
The payback: HSC Next’s program will provide mentoring, market research information, technology assessments and grant writing assistance. The program’s ambitious goal is to generate more than 100 SBIR proposals during the project’s term. Those grants are expected to return $18 million in federal funds to Tarrant County, which will in turn make an indirect impact of $23 million to the area.
Raising seed funding from traditional venture capital investors has become more difficult in recent years, especially for startups outside traditional tech hubs and those with women or minority founders. By contrast, SBIR funding is subject to a clear mandate in the Small Business Act to support the participation of women, people who are socially or economically disadvantaged and small business owners in underrepresented areas.
Help for minorities, biotech: The HSC Next team will target traditionally underrepresented groups, including woman- and minority-owned businesses. The program also will build on the already flourishing biotech field in Tarrant County, where small businesses have developed innovations for treating kidney, ocular and cancer conditions that are in late-stage clinical trials.
Get articles like this in your inbox. Subscribe to City News.