The Small Business Administration has made it easier for small businesses that receive venture funding to participate in a $2-billion-a-year federal grant program to promote innovation.

The Small Business Innovation and Research program had been open only to companies that were majority-owned by individuals who were U.S. citizens or permanent resident aliens. That barred many small companies with significant outside investor ownership from participating, says Morrison & Foerster partner Bradley Wine.

Under the new rules that went into effect Jan. 28, the grant funding can now be accessed by companies that are majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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