The St. Louis Post-Dispatch business section prints another puff piece allowing business interests to get their say out in the public without any criticism whatsoever.
Article
Biotech companies here and nationally are rallying against an interpretation of federal rules that squelches their ability to receive critical seed money for vaccines and other products that they say could save lives.
Nice appeal to the "they're just trying to help society part. What they're really wantiong to do is take government money meant for small businesses and diverting it to large ones, instead.
More after the jump.
What happened was that a Small Business Administration's Office of Hearings and Appeals judge ruled that companies with more than 50% venture capitalist (VC) ownership must be considered large companies, and therefore not be eligible for SBA grants.
And don't think the VCs don't have any political help.
Legislation sponsored by Republican Missouri Sen. Christopher "Kit" Bond and U.S. Rep. Sam Graves, R-Tarkio, would allow biotech firms with majority venture capital ownership to qualify for the grants. The Save Bio Technology Innovative Research Act is in small-business committees in the House and Senate, aides said.
I've written a letter to the reporter (which I've included in the extended) and am considering also sending it as a "Letter to the Editor" and to my congressmen (MO-01, Clay-D).
Advice appreciated. Here's the text of the letter.
Hello,
I read your piece on the Biotech who is unable to get SBA loans due to the having 50% VC funding.
While your piece gave some some intersting reasons for changing the rule, you don't seem to have found anyone who can find a better reason for the rule other that, paraphrasing, "there's no reason, it's just our policy".
I can think of some reasons myself.
1. SBA funding is limited. These firms already have a significnt source for funding (the VCs). Why should they be able to compete with less well connected businesses? (I guarantee every VC firm has an expert on getting government funding for a startup.)
2. Risk vs. Reward. By allowing VC-majority firms to get SBA grants, you are reducing the level of risk the VC experiences, and still allowing them to keep the same reward. VCs are well aware of this, and are trying to reduce there risk exposure as much as possible. While Chlorogen's goals are admirable, SBA grants are not the way to do it. If these vaccines are so promising, the VCs would be willing to invest in it themselves.
3. Beneficiaries of taxpayer dollars. We are all taxpayers, at all wealth levels. Do we really need to hand more of our taxpayer dollars to these extremely wealthy VCs, in the guise of "growing business"? There are real small businesses out there that would provide far more community growth than one of these large businesses would.
To me, this sounds like another yet another transfer of wealth of the middle to the upper classes, akin to public-financing of stadiums. And even a *business* reporter needs to be skeptical, when it comes to whose businesses are being favored, especially when politicians get involved.
Thank you for your time and attention,
James Hulsey
Florissant, MO