Startup News Digest 03/06/26

The Big Story: Senate advances long-awaited SBIR reauthorization

After months of uncertainty following their expiration in October 2025, the Senate unanimously passed legislation Tuesday night to reauthorize two federal programs that provide non-dilutive funding for early-stage R&D. For decades, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs have served as a lifeline for startups engaged in costly R&D activities. This week’s Senate action—coming more than five months into an historic lapse of the SBIR/STTR programs—would reauthorize the programs through September 2031.The bill is now being sent to the House, which passed its own reauthorization bill in September, ahead of the 2025 expiration date.

One of the major sticking points that led to the months-long logjam was concerns about multi-award winners—sometimes called “SBIR mills,” these are companies accused of winning repeated grants rather than moving their products towards commercialization. The new compromise between the bipartisan leadership of the Senate Small Business Committee—Joni Ernst (R-Iowa) and Ed Markey (D-Mass.)—addresses those concerns by allowing each of the eleven participating federal agencies to establish their own limits on the number of proposals submitted by an applicant. The bill creates a new follow-on funding pathway known as the Strategic Breakthrough track, which aims to help close the gap between SBIR research and commercialization. Eligible companies—those that have already received Phase II awards—could compete for larger awards with private matching requirements. The bill also increases security due-diligence requirements for applicants in response to growing national security concerns and expands data collection to better track whether SBIR-funded companies successfully commercialize their technologies.  

The House should quickly take up and pass the Senate bill, which would restore certainty in the program in the near term, but lawmakers should also work to continue to improve the program ahead of expiration in 2031. Longer-term reforms—such as making the programs permanent, streamlining the application process, and providing more feedback when applicants are rejected—would strengthen the program and make it more accessible to founders across the country. Congress should also revisit the idea—which was in Ernst’s original SBIR reauthorization bill—of creating a new, smaller and streamlined award to widen the funding funnel for early-stage startups that are new to SBIR.

Policy Roundup:

Online safety bills with major implications for startups advance from House committee, Senate. The House Energy and Commerce Committee advanced a package of online safety bills at a contentious and partisan markup on Thursday. As we wrote in a blog post ahead of the markup, the package will have a big impact on startups through problematic age verification, internal inconsistencies, and third-party audit requirements that are not feasible for startups. Also on Thursday, the Senate unanimously passed their version of the Children and Teens’ Online Privacy Protection Act. The House version of that legislation was slated to be marked up, but the committee did not vote on it in service of facilitating further bipartisan negotiations. The House’s version of that legislation includes recognition of the differences in capacity between startups and the largest platforms—provisions that are absent from the Senate version but that are critical for the House to maintain.

Senate panel examines role of AI in productivity and economic growth. The Senate Commerce subcommittee on science, manufacturing, and competitiveness held a hearing on Tuesday to examine how AI can improve Americans' quality of life, create jobs, and drive economic growth. Witnesses highlighted real-world examples of AI improving outcomes across industries, from helping doctors detect serious medical conditions faster, to reducing machine downtime, and boosting productivity in manufacturing. Policymakers and experts also emphasized the importance of workforce training, access to data, and long-term investment in AI research to ensure the U.S. remains competitive.

Trade Policy Agenda signals continued tariff-centered approach. On Monday, the U.S. Trade Representative Jamieson Greer delivered the President’s 2026 Trade Policy Agenda and 2025 Annual Report to Congress, outlining the administration’s continued push for its “America First” trade strategy. The agenda focuses on expanding their push for trade agreements that are underpinned by tariffs—hinting that more tariffs, including via Section 232 and Section 301, are coming. The agenda also touches on reviewing the U.S.-Mexico-Canada Agreement and suggests the administration will primarily seek bilateral negotiations over negotiations with all three parties.  Meanwhile, President Trump stated again Tuesday that his administration will raise to 15 percent his current 10 percent global tariff, and state attorneys general filed a legal challenge to those tariffs on Thursday.

House panel examines workforce training as AI use grows. The House Education and Workforce subcommittee on workforce protections held a hearing—as part of a series on AI—to discuss reforms to workforce training that would better prepare workers for the growth of AI-driven industries. Policymakers and witnesses highlighted the need to improve the nation’s workforce development system by modernizing the Workforce Innovation and Opportunities Act, emphasizing employer-led training models, skills-based education, and stronger collaboration to help workers build in-demand skills.

On the Horizon: 

TUE 03/10: The Senate Judiciary subcommittee on the Constitution will convene a hearing to examine birthright citizenship and the question of citizenship for children born in the United States to undocumented immigrants and tourists at 2:30 PM ET.

Startup Roundup:

#StartupsEverywhere:Oxford, Nebraska. When Sally Bunnell saw the sun setting on traditional music content production, she pivoted to user-generated content in the travel industry. Her app, NaviSavi, gives its users the opportunity to share and plan destination vacations based on the video content they and others share. We sat down with Sally to talk about her company, her approach to content moderation, and her experience building a company in Nebraska.