A Quick Overview of SBIR/STTR

1. NEVADA A Quick Overview of SBIR/STTR Dr. Fritz Grupe Email: fritz@unr.edu, or admin@mymajors.com 775-813-7407 Made Possible Through Funding From

2. Show Me The Money!!!

3. Research Opportunities Reserved for Small Business • Small Business Innovation Research (SBIR) Set-aside for small businesses to engage in federal R&D -- with potential for commercialization. • Small Business Technology Transfer (STTR) Set-aside to facilitate cooperative R&D between small business concerns and U.S. research institutions -- with potential for commercialization. 2.5% 0.30%

4. SBIR Program Eligibility • Organized for- profit U.S. business • At least 51% U.S.- owned by individuals and independently operated • Small business located in the U.S. • 500 or fewer employees • P.I.’s primary employment with small businessduring project

5. STTR Program Eligibility • Applicantis 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

6. SBIR/STTR: Critical Differences • Research Partner SBIR:Permits research institution partners [Outsource ~ 33% Phase I and 50% Phase II R&D] STTR:Requiresresearch 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

7. SBIR/STTR: Critical Differences • Principal 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

8. 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, …

9. Not all great ideas are funded.

10. 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 • Asimplified 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

11. SBIR/STTR’s 3-Phases PHASE I • Feasibility study • $100K and 6-month (SBIR) or 12-month (STTR) Award PHASE II • Full research/R&D • $750K and 2-year Award (SBIR/STTR) PHASE III • Commercialization stage • Use of non-SBIR/STTR funds

12. Variations • Fast Track (Phase I and II combined) • Phase II B (NSF will match 1:1)

13. 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? Proposal Phase I Phase II 1 2 3 4 Years Source: PCB, Inc.

14. Phase III Funders • Governmental agencies • Corporations • Venture capitalist firms/individual • Angel investors

15. 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.

16. 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

17. TOTAL ~ $2.0 + B FY 2004 SBIR / STTR Participating Agencies • 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

18. Don’t Judge an Agency’s Interests by Its “Name ” FACT: Many research areas of interest span across agencies • Avoid inaccurate assumptionsabout agency research missions (e.g., DOT is interested in “safety” NOT “economy”) • Maximize opportunities for funding by submitting proposals to as many relevant agencies as possible • Identical research • Complementary research

19. 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”

20. 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 ?

21. 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”

22. 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 Contracting vs. Granting Agencies DOD HHS/NIH NASA ED EPA DOT DOC HHS/NIH NSF ED USDA DOE

23. Grants vs. Contracts • Grants – You are selling your idea against other ideas • Contracts – You are selling your solution to their idea

24. 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)

25. Approximate Number of Awards

26. 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)

27. 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

28. Other Helpful Sites • www.sba.gov/sbir • www.zyn.com/sbir • www.pbcinc.com • http://www.cnytdo.org/files/SBIR_guide.pdf • (for a helpful manual that summarizes the contents of this workshop) • http://www.niaid.nih.gov/ncn/sbir/pres.htm

29. Firm Size Distribution* *FY01 Phase I DOD Award Winners 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.

30. Faculty 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

31. Getting Help With STTR 1. Federal Laboratory Consortium http://www.federallabs.org/ See Technology Locator 2. University technology transfer officer (if there is one) 3. Techmatch http://www.dodtechmatch.com/DOD/index.aspx

32. Current Issues • Reauthorization • Majority venture capital group ownership and control • Raising award amounts • Changing the set aside % and linkage from extramural to the full R&D budget • Lowering the $100m participation threshold to include smaller agencies • Providing agencies with administrative funds out of the SBIR pool • Increasing the percentage (ratio of work) allowed to subcontractors/universities

33. Commercialization assistance programs out of the SBIR pool (awardee's $$$) • Federal and State Technology Partnership (FAST) outreach to new entities • Rural Outreach Program (ROP) • SBIR Mentor/Protégé program • STEM (Science, Technology, Engineering and Mathematics) incentives • Energy Focus Area (similar in construction to the manufacturing clause)

34. 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

35. SBIR National Conferences April 21 -23, 2010 Hartford, Connecticut

36. Is it a Good Idea?

37. Top 6 Reasons to Seek SBIR / STTR Funding Opportunities 1. Over $2.3 Billion available 2.NOT A LOAN - no repayment 3. Provides recognition, verification and visibility 4. Fosterspartnerships (e.g., large corporations, academia)

38. Top 6 Reasons to Seek SBIR / STTR Funding Opportunities 5. Provides seed money to fund high risk projects 6.Intellectual property rights are normally retained by the business

39. Award Process Congratulations!The check is “in the mail…” (almost)