BayBio Applauds Introduction of Start-up Jobs & Innovation Act
Bill will encourage investment in growing innovative companies
SOUTH SAN FRANCISCO, Calif. – Nov. 6, 2013 – BayBio supports new legislation introduced by Senators Robert Menendez (D-NJ) and Pat Toomey (R-PA) that is designed to increase capital formation for R&D-focused companies in the early stages of development.
The Start-up Jobs and Innovation Act would encourage the private sector to invest in breakthrough research being conducted at young life science companies and other innovative small businesses across the Bay Area. Located in the birthplace of biotechnology, BayBio supports legislation that increases capital and resources needed to sustain critical innovation in the industry.
“BayBio supports legislation like the Start-up Jobs and Innovation Act that will help grow and nurture the next generation of life science giants,” said BayBio President and CEO Gail Maderis. “In one of the most challenging economic environments the industry has ever experienced, this bill will support their research by incentivizing early-stage private investment.”
The Bay Area has a rich history of venture capital with deep ties to Silicon Valley, securing $1.75 billion in VC investment in 2012. While the region boasts a mature life science industry with a market cap well over $150 billion, emerging innovators have been hurt by declining VC investments.
As traditional venture capital dollars have decreased since 2007, this Act will promote greater private investment in small business research. It will encourage investors to think beyond immediate gains and support the long-term growth of breakthrough innovators. The legislation would allow small companies to partner with their investors via R&D Partnership Structures, an important change that will incentivize early-stage investment and support small business innovation.
An independent study by Ernst & Young (E&Y) estimates that this proposal nationally will create 156,000 jobs while stimulating $10.3 billion in increased investment. The Start-up Jobs and Innovation Act also includes important reforms to the capital gains treatment of small business stock, business expensing for growing companies, and rules governing small firm accounting methods.
“This legislation is an important step to help drive the next generation of scientific advancement,” said Maderis. “BayBio supports the Start-up Jobs and Innovation Act because it will encourage important investments, support vital research, and stimulate the Bay Area economy.”