HSC awarded $2 million by Tarrant County to spur economic growth
The University of North Texas Health Science Center is the recipient of 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. It 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. “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.”
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.
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.
“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.”
SBIR grants boast a strong track record of 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. However, SBIR funding is drastically underutilized in Tarrant County, relative to other Texas regions.
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.
“We are proud to be a part of rebuilding our local startup ecosystem after COVID,” said Dr. Sylvia Trent-Adams, HSC president. “Small businesses are the heart of our economy, and HSC is committed to doing everything it can to help support the development and expansion of that sector. Dr. McClain and the whole HSC Next team have dedicated their careers to spurring innovation and business growth. I have the utmost confidence our great city will reap the benefits of our partnership with Tarrant County for years to come.”
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. To that end, the HSC Next team will target traditionally underrepresented groups, including women- 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.
One of the ways the Next team will communicate with small businesses and entrepreneurs about the program is through its Sparkyard platform, a critical connector of resources for entrepreneurs across Tarrant County.
Ranjan Misra is a business advisor to AyuVis Research Inc., a company HSC Next is currently helping grow. Misra’s company has been a past recipient of an SBIR grant, and he said the grants are a vital source for new businesses.
“The SBIR Grants are one of the most valuable resources available to startups that are taking their research forward to develop innovative solutions,” he said. “The grants offer a critical source of funding which is nondilutive, and, more importantly, the extensive peer review process provides strong validation of the research and potential for innovation. The visibility and access to other valuable resources is an added bonus. Every startup should explore and apply for SBIR grants if they are eligible and seek assistance from organizations like HSC Next to navigate through the process.”