If you have a great idea, but start your elevator pitch with “VC’s won’t fund this because…” have a look at the federal stimulus package. Here is a new funding source that is going to give our much loved and much maligned VCs some competition. Peruse a few VC firm websites and you will be quickly struck by the homogeneity of the VC world. And this world view is reflected in what deals they will fund.
Now here is a brand new big bucket of money – a really big bucket. This bucket has a long established if long winded funding process – the grant – that has a whole different point of view than the VC’s. Borrow your favorite biotech or academic friend who knows about grant writing and start digging for gold at www.recovery.gov
Thanks to the bullish panel at last night’s VLAB event “The New Stimulus Package: What Does it Mean for the Valley?” I have been tap dancing all morning. It’s great to hear a group of people with positive outlooks these days. And they are on to something.
Josh Becker of New Cycle Capital kicked off the discussion by putting the size of the stimulus package in context. I am so used to seeing the “$B” by federal budget and bailout numbers that I hadn’t really internalized what level of impact a $737B Stimulus Package will have. Josh took one example, the difference between the DoE annual budget of $25B. two-thirds of which is spent on “nuclear”, leaving $8B for energy. Compare that number to the $16.8B allocation to Energy and Efficiency in the Stimulus Package – a 200% increase. Well, that got my attention.
The panel that followed Josh’s introduction was very articulate and passionate about how the stimulus is a new funding source for entrepreneurs, transformational in its sheer size and scope. Chris Wright of Critical Connections talked about the opportunity to apply Silicon Valley style “technical muscle” to address the public priorities outlined in the stimulus package. DK Foster of Power Assure walked us through some of the nuts and bolts of a new world of what he called “B2G”. It’s clear everyone has to partner, if only to understand all the acronyms (EIN, DUNS, NAICS, FSC, PCS, CAGE, MPIN..).
Erik Stenehjem of Lawrence Livermore National Laboratory’s Industrial Partnerships Office would love to match one of LLNL’s technologies to an eager entrepreneur who wants to go after stimulus funding. David Katz of El Camino Hospital explained healthcare stimulus dollars are flowing to providers for Electronic Medical Records systems, so “money for the little guys” is hard. Providers have to adopt a certified EMR system by 2015 or risk penalties. My observation is that the providers will be spending those stimulus dollars and that will create opportunities for existing and new companies in the EMR space.
Josh was very upbeat in describing the seismic shift (my words) in the political landscape reflected in the stimulus package. No earmarks! Restraints on lobbyists! Transparency! Public good! I kept pinching myself, is this a movie? a dream?
So polish off that company idea you were really dreaming about before you had to massage it into the VC box. Really think about how it can play into the public good priorities of the stimulus package. Stay resilient through the long grant-finding-applying process, and apply for several. You will have a good shot at your dream.
Keep me posted! I’ll be here tap dancing.
P.S. Josh and DK’s presentations are available on VLAB’s site.
