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January 17, 2023
The Small Business Administration’s Growth Accelerator Fund
Competition
Small businesses and startups sometimes benefit from
History
assistance growing their companies, including opportunities
The SBA first operated the GAFC in FY2014, after a series
to raise capital, mentorship, and commercialization help.
of regional events in 2012 that convened over 100
Accelerators—organizations often operated by experienced
universities and accelerators in discussions about how to
businesspeople—provide technical assistance and other
work with high-growth entrepreneurs. These events helped
services to new entrepreneurs in an effort to meet those
lead to the development of the GAFC, which SBA has thus
needs and support the starting and scaling of businesses.
far held in FY2014, FY2015, FY2016, FY2017, FY2019,
FY2021, and FY2023.
Since 2014, the Small Business Administration (SBA) has
administered the Growth Accelerator Fund Competition
Congress has not provided the GAFC with specific
(GAFC) to provide financial support for accelerators
statutory authorization. Rather, the program operates as an
assisting science, technology, engineering, and math
SBA initiative under authority provided by section 105 of
(STEM) and research and development (R&D)-focused
the America COMPETES Reauthorization Act of 2010
small businesses and startups. The GAFC also targets
(P.L. 111-358), which authorizes federal agencies to
accelerators that support businesses and/or geographies that
administer innovation-related prize competitions. Several
traditionally face barriers in obtaining R&D funds and
bills in recent years, discussed below, attempted to provide
investment capital: businesses owned or led by women,
statutory authority for the GAFC.
minorities, and veterans, or businesses located in rural
areas. Until FY2023, the GAFC provided $50,000 awards
Table 1 presents the number of awards and the total dollar
to accelerators for operating capital; awards for the FY2023
amount awarded since the GAFC’s inception. From
GAFC range from $50,000 to $200,000.
FY2014 to FY2022, the GAFC made 387 awards—all for
$50,000—totaling $19.35 million.
Purpose
The SBA’s intent for the GAFC is to help facilitate the
Table 1. GAFC Awards Given, Total Value of Awards,
success of startups by supporting accelerators that advise
and Recommended Funding Levels, FY2014-FY2023
such businesses on growing revenue, sourcing outside
funding, and avoiding common mistakes. The GAFC’s
Total
goals include:
Awards
Recommended
Fiscal
Number of
Amount($
Funding
increasing the pipeline and success of STEM/R&D-
Year
Awards
millions)
($millions)
focused entrepreneurs and small businesses;
2014
50
$2.50
$2.50
increasing the success of STEM/R&D-focused
2015
88
$4.40
$4.00
entrepreneurs in accessing capital and resources to
2016
85
$4.25
$1.00
advance their businesses;
2017
20
$1.00
$1.00
incentivizing innovation-focused accelerators to provide
2018
0
$0
$1.00
equitable access to resources for underserved
communities and industries;
2019
60
$3.00
$2.00
catalyzing partnerships and relationships between
2020
0
$0
$2.00
accelerators to strengthen the national innovation
2021
84
$4.20
$2.00
ecosystem; and
2022
0
$0
$3.00
connecting both new and established participants in the
To be
national innovation ecosystem.
2023
$3.00b
$10.00
determineda
The SBA’s award announcements have noted SBA’s desire
Sources: SBA, Congressional Budget Justification and Annual
for the GAFC to stimulate entrepreneurship outside of
Performance Report, various years, and explanatory statements from
traditional coastal technology centers. In discussing GAFC-
various appropriations bil s.
related legislation, some Members of Congress have noted
the GAFC’s success in facilitating innovation in regions
a. SBA plans to announce the number of awards for FY2023 in
beyond those longstanding hubs.
two stages, first in April 2023 then in September 2023.
https://crsreports.congress.gov
The Small Business Administration’s Growth Accelerator Fund Competition
b. This is the projected amount cited by the FY2023 funding
In the 117th Congress, the House-passed version of the
announcement, based on FY2022 GAFC appropriations.
Build Back Better Act (BBA, H.R. 5376) would have
appropriated a total of $400 million to the GAFC through
Program Implementation
FY2031, established a minimum award amount of
The GAFC is open to applicants that are:
$100,000, and provided the GAFC permanent statutory
authority. H.R. 5376 evolved into P.L. 117-163 (commonly
private entities, both nonprofit and for-profit—including
referred to as the Inflation Reduction Act of 2022, IRA);
corporations—based in the Unites States;
the IRA, however, did not include any of the BBA’s GAFC
provisions. Also in the 117th Congress, H.R. 4945 would
nonfederal government entities including state, county,
have amended the Small Business Act of 1953 (P.L. 83-
tribal, and municipal governments;
163, as amended) to give the GAFC permanent statutory
authority and increase minimum award size to $1 million.
academic institutions based in the United States; or
The bill was introduced in the House but did not advance.
individuals or teams comprised of U.S. citizens or
Considerations for Congress
permanent residents 18 years and older.
Congress may consider whether to give the GAFC statutory
authorization. Some Members of Congress have argued that
In FY2023, the SBA implemented a new award structure
providing statutory authorization, rather than continuing the
for the GAFC. The SBA plans to award prizes in two
GAFC as an SBA initiative, would give Congress an
stages. Stage one awards, for $50,000, are to go to
opportunity to provide greater oversight.
“catalysts” to form a “Growth Accelerator Partnership”
with other catalysts. Catalysts may include entrepreneur-
The SBA is not required to collect specific performance
support organizations (such as accelerators), membership
metrics for the GAFC. H.R. 2686 and H.R. 4387 in the
organizations, academic institutions, and nonprofits
115th and 116th Congresses, respectively, would have
supporting innovation-focused small businesses and
required the SBA to gather certain metrics. For example,
startups that conduct outreach and facilitate collaborative
H.R. 4387 would have stipulated that the SBA develop
partnerships to advance a region’s innovation ecosystem.
“science-based” metrics that measured the GAFC’s
economic impact. Additionally, a 2018 evaluation of the
Stage two awards, worth between $50,000 and $150,000,
GAFC by the Library of Congress’s Federal Research
are to go to the resulting Growth Accelerator Partnerships.
Division (FRD) recommended that the SBA develop
The SBA intends the Growth Accelerator Partnerships to
“statistically sound” reporting metrics for the GAFC;
help entrepreneurs commercialize their R&D efforts by
improve the collection, monitoring, and maintenance of
using stage two awards for activities including training and
those metrics; and enforce mandatory reporting
mentorship, introducing entrepreneurs to customers and
requirements. Congress may debate if and how to act on
suppliers, and providing opportunities to pitch investors.
those recommendations.
The SBA requested that the Growth Accelerator
Congress may consider whether to require cost sharing.
Partnerships support small businesses and startups working
GAFC awardees are not required to provide matching
in one of the following “themes”:
funds. However, Congress and the SBA have considered a
cost share requirement. In the explanatory statement to the
underserved communities;
Consolidated and Further Continuing Appropriations Act,
2015 (P.L. 113-235), Congress instructed the SBA to
national security and competitiveness;
require $4 in matching funds for every $1 the agency
awarded through the GAFC; the SBA did not act on the
domestic manufacturing and production;
directive. The 2018 FRD evaluation also suggested a
required match could increase awardee engagement.
climate and renewable energy; or
Congress may consider the GAFC’s award size. Bills in
another theme proposed by the applicant.
previous Congresses sought to increase award sizes. The
2018 FRD evaluation (conducted when all awards were
Recent Legislation
$50,000) also noted feedback that the awards would benefit
The primary purpose of most GAFC-related bills in recent
from being increased or scaled. However, Congress may
Congresses has been to provide the program with statutory
note that the evaluation also found that the GAFC had been
authority. For example, in the 115th Congress, H.R. 2686
effective at its existing award sizes.
would have given the GAFC permanent statutory authority
and required the SBA to develop metrics evaluating the
Additionally, as the GAFC targets businesses and regions
program’s effectiveness. In the 116th Congress, H.R. 4387
that have had difficulty attracting financing, Congress may
similarly would have provided the GAFC permanent
want to further assess how effective such efforts have been.
statutory authority and required the SBA to develop
efficacy metrics. The bill passed the House but was not
Adam G. Levin, Analyst in Economic Development Policy
taken up by the full Senate.
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The Small Business Administration’s Growth Accelerator Fund Competition
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