Now that it has been over a week since the government shutdown, the public is starting to realize just how prominent a role our nation’s leaders play. Not only has the shutdown affected local tourist attractions, university research and the Panda Cam at the National Zoo, it has also delayed the funding for startup companies that receive financial assistance from universities.
Richard Ranky, founder and CEO of 3-Spark, has experienced the effects of the government shutdown directly. His company, which makes 3D printing more accessible through circuit boards and sensors, receives funding from Ranky’s alma mater, Northeastern University.
“They play a large role and we would not have gotten this far without them,” Ranky told BostInno, referencing Northeastern. 3-Spark, which officially formed in September 2012, initially received $100,000 from Northeastern. Since then, the company has continued to look for funding through government grants, private investors, accelerators and “anywhere we can find funding” Ranky said.
3-Spark applied for a National Science Foundation (NSF) Small Business Innovation Research grant in June and official review started September 10. SBIR grants are one of multiple classes of grants that are available through the NSF. According to the SBIR website, these grants do not require, but do encourage, partnership with a research institution. 3-Spark has chosen to subcontract to Northeastern. Unfortunately, the review has slammed to a halt thanks to the government shutdown.
Since it is never certain a startup will be awarded an NSF grant, there are always unknowns in the proposal process. Ranky said that the government shutdown has created even more uncertainty.
Before the shutdown, Ranky and his team were able to log onto the NSF website to view the status of their proposal. The login portal on Fast Lane included information on whether applications had been reviewed, the current statuses, etc., but now Ranky and his colleagues are left with a long apology about why they can no longer access this convenience.
According to Susan Finger at Carnegie Mellon University, NSF grants generally last for three years and most of the money goes toward supporting PhD students. A typical budget for a single PI grant is about $100,000 per year. The grant size varies from division to division. Once a proposal is submitted electronically, usually through www.fastlane.nsf.gov or grants.gov, the applicant receives a submission receipt that indicates the submission is ready for validation. Then the waiting game begins—a waiting game that has now become indefinite because of the shutdown.
The NSF website now reads:
Due to the lapse in government funding, National Science Foundation websites and business applications, including NSF.gov, FastLane, and Research.gov will be unavailable until further notice. We sincerely regret this inconvenience.
“Because the login is not working, we only have the flash page…and we don’t know when we will hear again about current reviews or pending reviews,” Ranky said.
While Ranky and 3-Spark are still answering emails, waiting to hear back on the results of MassChallenge and searching for investor funding and as much outside funding as possible, the pending consequences of the shutdown remain on everyone’s minds.
“Day-to-day, it does not have a huge impact but it does affect our fund-seeking strategies and depending on the timing and results we get back, it may affect our pending proposal,” Ranky said.
Since the government funding is affecting the review process now, Ranky suspects it may also slow down the calling process—the period in which each department of the NSF reveals which area of study are interested in providing funding and how much they are willing to provide for each area of research, respectively. The same people who are involved in the calling process are the ones reviewing the proposals, which makes it impossible to move to the calling step before finishing the review process.
Yet Ranky, who received his PhD from Northeastern University last December, is not letting the shutdown keep him from being productive. Even though getting a grant from the government would be a large boost for his company, it is not the only funding he is counting on.
“You have to be flexible and have different options,” he said of seeking out company financing. “Every company should have at least one proposal out all the time.”
The next step in the government shutdown is the Oct. 17 deadline, which is when the Treasury Department estimates the federal government will have enough money to pay all its bills. For the sake of all the university research, Panda watchers and startups out there, it will hopefully be a deadline that is met.
Featured Photo Courtesy of U.S. News & World Report