ARPA-E SBIR Grants Now Open to VC Funded Startups

The Department of Energy’s ARPA-E has announced that it will make its Small Business Innovation Research funding available to cleantech companies majority-owned by venture capital firms, hedge funds, and private equity firms.

Cheryl Martin, deputy director of ARPA-E, said in a letter to Chairman of the House Committee on Small Business Sam Graves (R-Mo.) that the change to the funding rules was spurred in part by the drying up of private-sector investment capital available to the cleantech space. PricewaterhouseCooper’s cleantech practice released figures earlier this year indicating that in the first quarter of 2013, VC funding channeled into cleantech totaled $369 million, a 61 percent drop from the same period in 2012. Martin pointed out in the letter that as funding has grown scarce, cleantech startups have been forced to turn to various types of investment vehicles for funding—a decision that shouldn’t negate their eligibility for SBIR support given the “demonstrated need for public research in advanced energy technologies,” she wrote.

Martin also expressed the hope that widening the field of cleantech startups able to apply for SBIR grants would attract more VC funding to the space, since an ARPA-E grant can help to de-risk a project.




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