Focus other Argonne scientist, Gerald T. Reedy, invented a gas chromatography-Fourier transform infrared spectrometry matrix isolation interface. The interface is manufactured by Reedy's company, Cryolect Scientific, and is distributed by Mattson Instruments (Madison, Wis.). Other analytical chemists with industrial backgrounds —such as Lloyd Snyder (Lloyd R. Snyder Inc., Orinda, Calif.), Nelson Alpert (Alpert & Sutcliffe, Stamford, Conn.), and Richard Dreher (RAD Associates, Cupertino, Calif.)—now provide full-time consulting services through their own small companies. One driving force behind this increase in small business formation by analytical chemists is the perception that large companies are sometimes unable or unwilling to consider outside ideas. Large companies are often slowed down by a decision-making apparatus that involves committees or a
large number of management levels. There is also what one academician described as a not-invented-here syndrome—a reluctance to get involved in outside projects when the company may already be juggling more internal development projects than it can handle. This sort of resistance by large, established instrument manufacturers was certainly a factor in the establishment of what has become one of the most conspicuous recent success stories in the field of analytical chemistry: Bioanalytical Systems. BAS president and founder Peter Kissinger explains that he first approached a number of large instrument manufacturers, but they were simply not interested in his new product ideas. "We were essentially willing to give the technology away for free to any company that would commercialize it," Kissinger explains, "but at that time
nobody wanted it." Since BAS was founded 10 years ago, its equipment line has been very popular. "Now," adds Kissinger, "there are about 13 companies manufacturing this same type of product, including some that originally decided it wasn't a good idea." With people like Kissinger showing that it can be done, others will, no doubt, continue to take the plunge. "The trend is very real," explains Hank Wohltjen. "There's a desire on the part of talented professionals to have the freedom and compensation they need to do a good job, which traditional types of jobs frequently do not provide." S.A.B. References (1) King, J. S. Clin. Chem. 1985, 31(5), 795. (2) Johnson, Roger. Genet. Eng. News 1985,5(3), 28.
SBIR: Venture Capital from Uncle Sam A few years ago, Niagara Scientific (East Syracuse, N.Y.) sought Small Business Innovation Research (SBIR) funding for development of a monitor that would detect ethylene oxide at lower concentrations than was then possible. An initial $30,000 grant made it possible for Niagara scientists to demonstrate the feasibility of the concept. This led to a commitment of financial support from a third party, and another $200,000 in SBIR largesse helped seal the deal. Today, Niagara Scientific's ethylene oxide monitor is well on its way to commercialization, and patents have been applied for. But without the SBIR grant money, the monitor would probably not have been developed. "We are a company that started with zero capitalization," explains principal investigator Sylvan Beer. "Without those funds we would not have been able to do the work we're doing on developing new products, period." The company has since won other SBIR grants for a new formaldehyde monitor and for development of analytical techniques to detect chemical warfare agent simulants. The SBIR program was set up specifically to fund high-risk research such as this. Pioneered by the National Science Foundation (NSF) in 1977, the concept was so successful that it was expanded by a 1982 act of Congress to 11 other federal agencies. Under the terms of the program, these
agencies earmark up to 1V4% of their extramural R&D budgets for grants to small companies. The program has been designed to encourage private sources to provide the bulk of support for projects proved feasible with assistance from SBIR seed grants. The funding is organized into three phases. In Phase I, the granting agency awards up to $50,000 (currently limited to $40,000 at NSF) to each successful proposal. About 10% of submitted proposals win this proof-ofconcept funding each year. If the company can show that the concept is workable and if it can obtain third-party funding to support further commercialization, the government will consider granting up to $500,000 (limited to about $200,000 at
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NSF) of additional support, referred to as Phase II. Although the survival rate from Phase I to Phase II is a fairly healthy 50%, some relatively worthy projects do not make the cut. As Ritchie Coryell, SBIR program manager at NSF, puts it, "This is not an overfunded program by any stretch of the imagination." Phase III, the full-scale product or process development phase, is supported by venture capital funding or by large industrial firms. No government funds are provided in Phase III. The strength of the SBIR program has been its success in enabling small companies to obtain external, private support from venture capitalists or large companies for worthy, albeit risky, new projects. SBIR program managers are already looking toward 1988 when the program will expire unless it is renewed by Congress. Views differ as to the prospects for renewal, but Coryell feels that the indications are positive. "We think there is a large reservoir of support from the venture capital industry, from high-tech manufacturers, and on Capitol Hill," he says. And if the attitude of Niagara Scientific toward the SBIR program is any indication, Coryell may prove to be right. As Sylvan Beer puts it, "The SBIR program is one of the best things that's ever happened to small companies." S.A.B.
