7.6   SOURCES FOR CAPITAL

A traditional method of obtaining start-up funds to bring a design to market has been through venture capital. This was the source Xilinx, Inc. and other FPGA companies initially used to get started. A lengthy process of “courtship” between the venture capitalists and the team who is proposing the new venture is necessary and may not result in success. It is projected that venture capital will become less available during the 1990s [Bell91]. However, during the 1980s, sources of government funding have become available in the United States to stimulate small business growth and also to encourage the collaboration between university-based technological research and commercial development.

7.6.1   Small Business Innovation Research

Small Business Innovation Research (SBIR) was established by an act of the U.S. Congress in 1982 to allocate research and development (R&D) funds solely to stimulate small business. The purpose was to both benefit small businesses and to meet R&D needs of federal agencies. The Act was reauthorized in 1992 with legally mandated step increases in the allocation of funds through 1997. Eleven federal agencies participate in SBIR; Department of Agriculture, Department of Commerce, Department of Defense, Department of Education, Department of Energy, Department of Transportation, Environmental Protection Agency, Department of Health and Human Services, National Aeronautics and Space Administration, National Science Foundation, and Nuclear Regulatory Commission.

The Small Business Administration (SBA) sets overall guidelines regarding the SBIR program. Information relative to the requirements for application, proposal procedures, and so forth, can be obtained from the SBA.

7.6.2   Small Business Technology Transfer Program

The Small Business Technology Transfer Program (STTR) came into existence in October 1992. This program is intended to exploit commercially promising ideas that originate in universities, federally funded research and development centers, and not-for-profit research institutions. Five federal agencies are participating in the STTR program; Department of Defense, Department of Health and Human Services, National Aeronautics and Space Administration, Department of Energy, and National Science Foundation.

As with any new and promising idea, seeking advice and obtaining funding to allow for the commercialization of the proposed product is not only beneficial to the designer but also to industry. The semiconductor industry has grown as a result of the creative thinking of engineers and their willingness to take risks and follow an entrepreneurial spirit.

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