SBIR/STTR Introductory Workshop

Dr. Fritz GrupeEmail: fritz@unr.edu, or

fhgrupe@gmail.com 775-813-7407

Made Possible ThroughFunding From

Workshop Agenda

• What are SBIR and STTR?• The phases• Eligibility• Agency differences• What do they pay for?• University participation• Resources you can draw on• Summary of characteristics of successful proposals• Summary of why you might consider applying

Show Me The Money!!!

Why SBIR????

Congress designated 4 major goals

Small Business Innovation Development Act of 1982

• Stimulate technological innovation

• Use small business to meet federal R&D needs

• Increase private-sector commercialization innovations derived from federal R&D

• Small Business Innovation Research (SBIR) Set-aside for small businesses to engage in federal R&D -- with potential for commercialization. (will be increasing to 3.2% over 6 yrs.)

• Small Business Technology Transfer (STTR) Set-aside to facilitate R&D between

small business concerns and U.S. research institutions (increasing to .45% over 5 yrs.)

Research Opportunities Reserved for Small Business

2.5%

0.30%

SBIR Program Eligibility

• Organized for- profit U.S. business • At least 51% U.S.- owned and independently

operated OR at least 51% U.S.-owned and controlled by another for-profit business that is at least 51% U.S. owned and independently operated

• Small business located in the U.S. • 500 or fewer employees• P.I.’s primary employment with small

business during project

STTR Program Eligibility

• Applicant is a small business– Formal cooperative R&D effort

• Minimum 40% by small business - Minimum 30% by U.S. research institution

• U.S. research institution– College or university; other non-profit research

organization; Federal R&D center

• Intellectual property agreement– Allocation of rights in IP and rights to carry out

follow-on R&D and commercialization

SBIR/STTR: Critical Differences

• Research PartnerResearch Partner

SBIR: Permits research institution partners

[Outsource ~ 33% Phase I and 50% Phase II R&D]

STTR: Requires research institution partners (e.g., universities)

[40% small business concerns (for-profit) and 30% U.S. research institution (non-profit)]

Award Is Always Made To Small Business

• Principal InvestigatorPrincipal Investigator

SBIR: Primary (>50%) employment must be with small business

STTR: Primary employment not stipulated [PI can be from research institution and/or

from small business concern*]

*DISCUSS WITH AGENCIES

SBIR/STTR: Critical Differences

Questions as to Eligibility?

• Contact the SBA size specialists• Request an eligibility determination

http://www.sba.gov/size/indexcontacts.html

• DOD SBIR/STTR• HHS SBIR/STTR• NASA SBIR/STTR• DOE SBIR/STTR• NSF SBIR/STTR• DHS SBIR (Dropping)• USDA SBIR• DOC SBIR• ED SBIR• EPA SBIR• DOT SBIR

SBIR / STTR Participating Agencies

TOTAL ~ TOTAL ~ $2.0 $2.0 + B+ B

FY 2004FY 2004

What is Funded Under SBIR/STTR?

• Innovation through the use of emerging technologies

• Novel application of existing technologies – a new area of application

• New capabilities or major improvements to existing technologies in efficiency, effectiveness, simplicity, …

Not all great ideas are funded.

Advantages of SBIR/STTR Programs

• A specific “shopping list” for small firms describing what the government agencies need/fund

• Significant amounts of R&D money reserved for small, innovative firms

• Funding for early-stage feasibility and prototype studies--the type of R&D for which private firms and financing groups won’t provide investment

• A simplified route to obtaining federal R&D funds• Does not penalize a firm for being small or isolated• Provides valuable credibility to winning companies• Efficient use of federal R&D funds

SBIR/STTR’s 3-Phases

PHASE I Feasibility study $150K+ and 6-month (SBIR)

or 12-month (STTR) Award

PHASE II Full research/R&D $1M+ and 2-year Award

(SBIR/STTR)

PHASE III Commercialization stage Use of non-SBIR/STTR funds

Variations

• Fast Track (Phase I and II combined)• NSF

– Phase IB (1:2 match to $30K)– Phase IIB (NSF will match 1:3 to $500K)

• Commercialization assistance– Department of Defense– National Institutes of Health– National Science Foundation– Department of Energy

• Sole source status• Up to 25% may be made available to larger companies

Phase I Phase II Phase III

Another Look at the Phases

BeyondSBIR???????

Phase IV

The SBIR/STTR Timeline

• The SBIR/STTR Phase I/Phase II completion timeline is from 3 to 5 years (best case).

• Can your company survive during this time?• Will the marketplace for your idea survive this timeline?• Who is your competition? How are they funded? Where

will they be after 3 to 5 years?

1 2 3 4

Proposal Phase I Phase II

Years

Source: PCB, Inc.

Phase III Funders

• Governmental agencies

• Corporations

• Venture capitalist firms/individual

• Angel investors

Some Facts to Remember

• Eligibility is determined at time of award

• The PI is not required to have a Ph.D.

• The PI is required to have expertise to oversee project scientifically and technically

• Applications may be submitted to different agencies for similar work

• Awards may not be accepted from different agencies for duplicative projects

Performance of Research Activities

• All R&D must be performed in its entirety in the U.S.– Rare cases to conduct testing of specific

patient populations outside of the U.S.– Travel to scientific meetings in foreign

countries is allowable– Foreign consultants/collaborators are

allowable, but must perform consulting in the U.S.

What Does SBIR Pay For?

• Direct Costs– Including fringe benefits

• Indirect Costs

• Fee/Profit– Up to 7% of the total direct and F&A costs.– Must be requested in the proposal to be

eligible.

• Not all costs are allowable

Don’t Judge an Agency’s Interests by Its “Name ”

FACT: Many research areas of interest span across agencies

Maximize opportunities for funding by submitting proposals to as many relevant agencies as possible

Identical research Complementary research

Avoid inaccurate assumptions about agency research missions (e.g., DOT is interested in “safety” NOT “economy”)

Understand Each Agency’s Culture

What are its distinct missions and needs ?

Is the agency program budget –centralized or de-centralized ?

relationship to “topic authors”

Understand Each Agency’s Culture

What are the lines of communication? when (when not) to call… who to call… why to call…

How does the review and award process operate?

Who are the reviewers – internal, external, or both ? Who makes the final award selection ?

Understand Each Agency’s Culture

What are the types of awards (contract or grant) ?

Are there “funding gap” programs ?

Does the agency offer a “technical assistance” program ?

How can the agency support a firm’s “commercialization” program ?

as a Phase III “customer” by providing external “contacts”

Contracting vs. Granting Agencies

• Contracting Agencies– Agency establishes

plans, protocols and requirements

– Highly focused topics– More fiscal

requirements

• Granting Agencies– Investigator initiates

an idea– Less well-specified

topics– More flexibility

DOD HHS/NIHNASA EDEPA DOTDOC

HHS/NIH NSFED USDADOE

Grants vs. Contracts

Grants – You are selling your idea against other ideas

Contracts – You are selling your solution to their idea

Agency SBIR Differences• Number and Timing of Solicitations

• R&D Topic Areas -- (Broad vs. Focused)

• Dollar Amount of Award (Phase I and II)

• Proposal Preparation Instructions

• Financial Details (e.g., Indirect Cost Rates, Gap Funding)

• Receipt Dates

• Proposal Review Process

• Proposal Success Rates

• Type of Award (Contract or Grant)

Approximate Number of Awards

Department of Agriculture 90

Department of Commerce 50

Department of Defense 1800

Department of Education 35

Department of Energy 200

Department of Health & HS 1030

Dept. of Homeland Security (04) 100

Department of Transportation 20

Environment Prot. Agency 45

NASA 310

National Science Foundation 250

Nuclear Reg. Commission 0

Relative SBIR Agency SizesRelative SBIR Agency Sizes

• Dept. of Defense• National Instit. Health• National Sci.

Foundation• Dept. of Energy• NASA• All Others

Total

• $1.3 billion• $680 million• $161 million

• $154 million• $130 million• $82 million

$2.5 billion

SBIR Success Ratios

• Phase I– Historically, 1 out of 10 proposals are funded– Recently, 1 out of 7 proposals were funded– Last year, it was back to 1 out of 10 proposals

funded

• Phase II– Between 1 out of 2 to 1 out of 3– Some Phase IIs become contracts (Phase III)

For more information…..For more information…..

Contact individual agency websites

Cross-agency website:

http://www.sbir.gov

Conferences / workshops Topic search engine for all agencies Partnering Opportunities State Newsletters

www.SBIR.gov www.SBIR.gov

SBA TechnetSBA Technethttp://tech-net.sba.gov/tech-net/public/dhttp://tech-net.sba.gov/tech-net/public/d

sp_search.cfm sp_search.cfm

Other Helpful Sites

• www.sba.gov/sbir

• www.zyn.com/sbir

• www.pbcinc.com

• http://www.sbtdc.org/pdf/sbir_handbook.pdf (for a helpful manual that summarizes the contents of this workshop)

• http://www.niaid.nih.gov/ncn/sbir/pres.htm

Who Participates in SBIR? Firms are typically small and new to the program.

About 1/3 are first-time Phase I awardees.

Small hi-tech firms from across the country.

*FY01 Phase I DOD Award Winners

Firm Size Distribution*

Advice from Awardees

Don’t Don’t judge an agency’s interests byits “name name ”

Understand agency’s mission andagency’s mission and needsneeds Get to know your agency program agency program

managermanager Read solicitation and follow follow

instructionsinstructions

Advice from Awardees Don’t depend solelysolely on SBIR funding

Don’t go it alone alone - use support systems

Have an outcomeoutcome

Win or lose - get and review get and review evaluations

Be PERSISTENTPERSISTENT

Proposal FrameworkProposal Framework

SignificanceMarket

CommercialPotential(Phase III)Problem

Approach

Solution

Tech.Objectives

WorkPlan

Budget

Capability

TeamFacil-ities

Purpose

Innovation

Legend for Criteria

o Scientific/Technical Approach

o Ability to Carry out Project

o Impact

Courtesy Dr. Robert Berger, former Department of Energy SBIR-STTR Program Manager and MS-FAST Consultant

http://books.lulu.com/content/106258

Commercialization Planning

• For most agencies, you determine the customer, define the market

• For DoD and NASA, perhaps others, the agency is the customer, ultimate user– Usually down to program level – Procurement channels often complex

• For DoD, “commercialization” means “transition”

Intellectual PropertyIntellectual Property

• To retain rights to IP, the company:– Must report invention to the agency within 2 months– Elect rights within 2 years– File application within 1 year

• US Gov. may “march in” if contractor fails to report or elect, or if it is not commercialized, or for health/safety reasons

• Must be substantially manufactured in U.S. (waivers possible)• A recent court case (Stanford v. Roche) emphasized the need

for all organizations to be clear on employee/consultant contracts (ex. If a university employee is on loan to a company, to whom does an invention belong?)

University-Business Partnership Opportunities

• Own small firms (assign someone else PI)

• Principal investigator (with official permission from university)

• Senior personnel on SBIR/STTR

• Consultants on SBIR/STTR

• Subcontracts on SBIR/STTR

• University facilities provide analytical and other service support

University and Industry:Two Different Cultures

Industry researchers Industry researchers

are from MARSare from MARS

University researchers University researchers

are from Venusare from Venus

Getting Help With STTRGetting Help With STTR1. Federal Laboratory Consortiumhttp://www.federallabs.org/See Technology Locator

2. University technology transfer officer (if there is one)

3. Techmatch http://www.dodtechmatch.com/DOD/

index.aspx

NV Tech Transfer PeopleNV Tech Transfer People• Richard Bjur, UNR/DRI, Special Asst To VP

Graduate School Ms 0321, Reno, Nevada 89557, (775) 784-4116, bjur@unr.edu

• Elda Luna Sidhu, Assist. General CounselUNLV, 4505 Maryland Parkway, Box 451085, Las Vegas, Nevada  89154-1085, Ph: (702) 895-5185, elda.sidhu@unlv.edu

NSBDC’s SBIR Assistance:

• Enhancing communication with agencies

–Possible future agency representatives in the state

–There are some local contacts

• Agency Searches

• Guidance and assistance

• Reactions to proposals

• Location of potential partners

• Location of local proposal writers

• Suggestion of alternative funding sources such as EPSCOR, MAP, etc.

http://nsbdc.org/how-we-can-help/http://nsbdc.org/how-we-can-help/technology_innovation/technology_innovation/

http://nsbdc.org/how-we-can-help/http://nsbdc.org/how-we-can-help/technology_innovation/technology_innovation/

1. Funding, Marketing, Patenting, Etc

2. Sample Proposals

3. Links To Search Engines

4. Past Award Winners

5. Nevada University Research Centers

SBIR National Conferences

November 2012Portland, OR

Some Problems and Issues

• Intellectual property• Time and effort to write, wait for, account for a

grant• Distractions• Do you have enough horses to do the job?

– Partners?– Equipment

• Funding gaps• Funding is specific

Levels of ReviewLevels of Review

• Administrative - Does the proposal meet formating and other technical requirements (10-15% are rejected)

• Manager – Is it a reasonable submission, responsive, etc.

• Panel/merit review – How does it compare to the other proposals

• Agency selection – How many from each area will be funded?

DOD FORMAT(1) Identification and Significance of the

Problem or Opportunity(2) Phase I Technical Objectives

(3) Phase I Work Plan

(4) Related Work

(5) Relationship with Future Research orResearch and DevelopmentState the anticipated results of the proposed approach if the project is successful

Discuss the significance of the Phase I effort in providing a foundation for Phase II research

(6) Commercialization Strategy

(7) Key Personnel

(8) Facilities/Equipment(9) Subcontractors/Consultants

Lack of experience with essential methodologies

Unrealistically large amount of work proposed

Over budget, over page limit, incorrect format

P.I. credentials weak, weak team Milestones not detailed

From HereFrom Here

• Keep up on solicitations for new topics

• Keep your innovation current

• Keep looking for people and companies to help

• Decide whether you have to rely on SBIR for funding

Get Help From OthersGet Help From Others

• Incubator/Accelerator Executives

• Centers of Innovation

• National Laboratories

• Small Business Development Centers

• Non-competitive Small Business Innovation Research Program Awardees

Top Reasons to Seek FundingTop Reasons to Seek Funding

• $2.5 Billion Available

• Not a loan or an investment – no repayment

• Provides recognition and validation

• Fosters partnerships

• Seed money funds risky projects

• IP stays with the company

• Offers an advantaged sole source position

The ChallengeThe Challenge((From the SBIR Coach, Fred PattersonFrom the SBIR Coach, Fred Patterson))

• The game is very competitive

• The rules are hard to interpret

• Good proposals are hard to write

• Proposals are somewhat objective

• Agency priorities trump your ideas

• The money doesn’t flow quickly

• Subject to scrutiny, audits, etc.

Otto Rohwedder’s Path to Otto Rohwedder’s Path to CommercializationCommercialization

• Milestones:1912 Otto Rohwedder toys with the idea of producing a machine to slice bread1916 Rohwedder begins to design a machine to slice bread1917 fire destroys his factory, prototype machine and the blueprints1926 Toastmaster begins selling pop-up toasters1927 Rohwedder finally saves enough money to begin again to build a bread slicer1928 Rohwedder files patent application for a single step bread slicing machine1928 forms a company Mac-Roh Sales & Manufacturing to build and sell the bread slicer machine1928 first mechanical pre-sliced bread goes on sale to the public in Chillicothe, Missouri1929 St. Louis, Missouri baker, Gustav Papendick, adds improvements to Rohwedder's machine. 1930 Wonder Bread begins selling pre-sliced bread, most bakeries follow suit1932 toaster sales skyrocketed, thanks to the standardized size of sliced bread1933 American bakeries were turning out more sliced than unsliced bread 1933 Rohwedder sells patent rights to and goes to work for Micro-Westco, Inc.1934 Patent 1,970,379 issued August 14, 1934 for Slicing Machine assigned to Papendick, Inc.sliced bread, bread slicer, bread slicing and wrapping machine, toaster, Otto Rohwedder, Gustav Papendick, M. Frank Bench, wonder bread, invention, history, inventor of, history of, who invented, invention of, fascinating facts.

Congratulations!Congratulations!The check is “in the mail…”The check is “in the mail…”

(almost)

Award ProcessAward Process