Joint Agreement to Drive Investment to U.S. Critical Technologies
The U.S. Small Business Administration (SBA) and the U.S. Department of Defense (DoD) signed today a historic Memorandum of Agreement at the South by Southwest (SXSW) festival in Austin, Texas. The Agreement forms a public-private investment partnership initiative that will help accelerate and scale private investment and DoD’s support for innovative technologies critical to U.S. national security.
Going forward the DoD’s newly established Office of Strategic Capital (OSC) and the SBA’s Office of Investment and Innovation (OII) will partner as part of the Small Business Investment Company Critical Technologies (SBICCT) Initiative. This joint initiative supports the “Biden-Harris Administration’s whole-of-government strategy to bolster America’s leadership in global innovation and to strengthen our national security”.
The two government agencies have a long-standing partnership that is now extended by their commitment to bring capital and resources to private funds aligned to America’s national security mission.
“Throughout its 65-year-long history, the SBA’s Small Business Investment Company (SBIC) program has seeded and scaled some of the most innovative and successful businesses in the world. From semiconductors to personal computers to electronic vehicles, public-private SBIC partnerships have sparked the growth of new industries by growing startups and sustained small businesses fulfilling critical needs in our domestic supply chain and communities around the country,” said Bailey DeVries, Associate Administrator of the SBA’s Office of Investment and Innovation.
One key step forward is the modernizing of the SBIC program that will include a new financial instrument called the Accrual Debenture. The financing will fill the gap that often occurs in capital-intensive technology sectors critical to national security. The program will help in the area of defense-related innovations that often require heavy research and development investment and capital expenditure in their early stage. It specifically will align with the long duration of private funds that commit capital for the development of such innovations.
“By licensing new limited partnerships vertically focused on deep technology areas, we can leverage new investment funds to provide patient sources of capital for these critical technologies,” said OSC Director Dr. Jason Rathje. “We’ve been able to bring back the SBIC program for national security to make investment opportunities in early-stage technology companies and capital-intensive small businesses addressing today’s most pressing national security supply chain needs.”
