TL;DR: Senator Joni Ernst’s INNOVATE Act proposes long-overdue reforms to the federal SBIR/STTR programs. The legislation is designed to streamline processes, reduce barriers, and ensure taxpayer dollars are well spent while helping startups more efficiently access funding for R&D and commercialization.
Federal Funding Shouldn’t Be a Labyrinth
Startups and small businesses are the engine of American innovation, but accessing non-dilutive federal funding often feels more like navigating a maze than launching a rocket. Lengthy application processes, lack of transparency, and a system favoring repeat awardees over fresh innovators have made SBIR/STTR funding harder to tap for new entrants. That’s why a new bipartisan proposal, the INNOVATE Act, is capturing attention across the innovation ecosystem.
What Is the INNOVATE Act?
Introduced by Senator Joni Ernst (R-IA), the Improving New Ventures and Opportunities to Validate American Technology and Entrepreneurship Act (INNOVATE Act) proposes targeted improvements to the SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) programs. These programs are among the most important sources of non-dilutive funding for startups working on cutting-edge R&D. However, the current structure leaves much to be desired.
The INNOVATE Act aims to:
- Streamline the application process to reduce unnecessary burden on applicants.
- Prioritize commercialization and accountability through stronger metrics.
- Prevent abuse by limiting serial awardees who fail to commercialize.
- Encourage new entrants and diversify the applicant pool.
- Improve oversight and reduce waste to protect taxpayer dollars.
Why Startups and Supporters Should Care
The current SBIR/STTR ecosystem rewards persistence and compliance more than innovation and results. Many small businesses submit dozens of proposals before landing a single win, or worse, give up entirely due to the bureaucratic red tape. Meanwhile, a small fraction of companies continue to secure repeat awards without ever bringing a product to market.
This legislation recognizes those flaws and offers a path toward:
- A fairer playing field for new applicants.
- Greater ROI on federal investments through stricter commercialization tracking.
- Less paperwork, more focus on innovation.
- Enhanced competition, especially for underrepresented founders and regions.
For innovation consultants, funders, incubators, and the startups they support, the INNOVATE Act could usher in a more accessible, effective, and equitable funding landscape.
What Happens if We Stay the Course?
Without reform, we risk stagnation in one of our country’s most critical funding engines for innovation. Talented startups will continue to hit bureaucratic walls. Taxpayer dollars will keep cycling through the same players without results. And America may lose its competitive edge in areas like climate tech, advanced manufacturing, biotech, and AI.
A Modernized, Accountable SBIR/STTR Program
The INNOVATE Act doesn’t scrap what works—it builds on it. It keeps the spirit of these programs alive while introducing modernization efforts to:
- Broaden impact
- Reduce waste
- Improve transparency
- Help startups thrive
This is especially vital as we face global economic and technological competition. A stronger, more agile SBIR/STTR program ensures the U.S. continues to lead in innovation.
Let’s Push for Change That Matters
Whether you’re a startup founder, funder, or advocate for innovation-driven economic development, this is your moment to engage. The INNOVATE Act aligns with the goals we all share: leveling the playing field, rewarding real progress, and fueling tomorrow’s breakthroughs.
Ready To Take the Next Step?
We assist our clients in locating, applying for, and evaluating the outcomes of non-dilutive grant funding. We believe non-dilutive funding is a crucial tool for mitigating investment risks, and we are dedicated to guiding our clients through the entire process—from identifying the most suitable opportunities to submitting and managing grant applications.