Post on 12-Apr-2017
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Go to https://www.interkn.com for more free innovation funding information.
What we’re going to review?• About the SBIR Program• Basics of the Program
• History, Structure, Eligibility, Analytics
• Strategy for Applying• Selecting the right agency• How to position your idea/proposal
• Getting the most from this presentation• Problems/How to Navigate
• Questions
What are the SBIR and STTR Programs?Approximately $2 Billion in Federal Funding that:
Supports Small Businesses Stimulates Technology Innovation Commercializes Products
Small Business R&D,0.06% of the Federal Budget
The Federal Budget Galaxy
88%, SBIR
12%, STTR
Small Business R&D,0.06% of the Federal Budget
What are the SBIR and STTR Programs?
SBIR Program(Small Business Innovative Research)
• Stimulate technological innovation through Federal Research and Development (R&D)
• Foster job creation and participation in innovation and entrepreneurship through small businesses in the US.
• Increase private sector commercialization of innovations derived from federal R&D.
STTR Program(Small Business Technology Transfer)
• Stimulate technological innovation through Federal Research and Development (R&D)
• Foster technology transfer through cooperative R&D between small businesses and research institutions.
• Increase private sector commercialization of innovations derived from federal R&D.
How are the SBIR and STTR Programs Funded?
SBIR Program(Any Agency with R&D Budget > $100 Million)
• Required to allocate 3.0% of their R&D Budget to these Programs
STTR Program(Any Agency with R&D Budget > $1 Billion)
• Required to allocate .45% of their R&D Budget to these Programs
Goal of the SBIR/STTR Programs(Not an alternative to funding basic research)
Valley of Death
Idea
Product
Goal of Traditional Seed FinancingIsn’t that the same image? What’s the difference between the two?
Valley of Death
Idea
Product
VC and Traditional Funding
DebtFinancing
Traditional Funding Dollars
Payback
Diluted Equity
EquityFinancing
SBIR/STTR Funding
Federal Agencies
SBIR/STTR Award Dollars
Payback
Diluted Equity
Federal Budget
History of the SBIR Program
Modern Day SBIR Program- Authorized as part of NDAA in
2016- Separate Legislation for SBIR/STTR- Funding directly proportional to
agencies existing extramural research budget (ie. Money spent on R&D outside of Gov facilities)
SBIR/STTR Structure – Levels of Authority Congress
Small Business Administration (SBA)
Federal Agencies
Legislation Establishing and Re-Authorizing the Program
• R&D Budgets for Participants• Funding Levels• Program Intent and Goals• EligibilityTranslates law into Policy Directives
• Clarifies eligibility rules• Establishes general policies• Oversees compliance
Customize the programs to fit their mission• Technological Innovation Requirements• Award Mechanisms and Size of Awards• Duration of Projects
What type of awards are the SBIR and STTR?
Grants
• Assistance
• Scope is well-defined, no formal deliverables
• Progress/Final Reports
• Broad Topics
• Agency contact is unlimited
• No Phase III opportunities
Contracts
• Procurement
• Well-defined, legally binding statement of work, obligations, responsibilities
• Specific deliverables defined
• Topic-specific response
• Agency contact limited
• Phase III opportunities
Granting vs. Contracts AgenciesNational Science Foundation
(NSF)
Granting Agency
2 Award Cycles Annually
External Peer Review Evaluation of Proposals
Broad Topic Areas
Applicant Specific Deliverables
NSF will NEVER be a customer
Department of Defense(DoD)
Contracting Agency
3 Award Cycles Annually
Internal Evaluation Process of Proposals
Specific, Detailed Topics
DoD – Defined Deliverables
DoD is a Prospective Customer
Three Phased ProgramPhase I Phase II Phase III
Feasibility Development Commercialization
Program
Budget
Duration
Program
Budget
Duration
Program
Budget
Duration
SBIR/STTR SBIR/STTR Non-SBIR/STTR
$150,000*
6 Months
$1,000,000*
2 Years
???
???
* Agencies have authority to exceed budget by 50%
Product Lifecycle Structure and Reducing Risk
Risk
Product LifecyclePhase I Phase II Phase III
IdeaProof of Concept
Prototype
Product
Customers
Prelim Data
Feasibility
Product Development
Commercialization
Alternative and Supplemental Programs
Phase I Phase II Phase III
Phase IB ProgramProvides additional
Phase I dollars
Fast Track ProgramApply for Phase I & II
Simultaneously
Phase IIB ProgramProvides additional
Phase II dollars
Direct to Phase IIBypass Phase I
Commercialization Readiness Programs
Continued funding to build business and marketing strategy
* Agency Specific, not all have these programs
Am I eligible for this money?• For-Profit?• < 500 Employees• Not Majority Owned by VC, PE, or
Large Company > 500 employess• U.S. Owned (>50%) • U.S. Located• Plan to work R&D in the U.S.
Is your entity eligible for this money?• Individual Proprietor• Partnership• Limited Liability Corporation (LLCs)• Corporations (C, S)• Joint Venture• Association• Trust• Cooperative
Agency Analytics (11 Participating)
SBIR Total STTR Total
DOA 22,541,521 22,541,521 1% 100%DOC 10,041,617 10,041,617 1% 100%DOD 675,796,000 91,758,768 767,554,768 40% 88%ED 11,991,440 11,991,440 1% 100%DOE 206,950,457 27,862,995 234,813,452 12% 88%DHHS 454,709,162 63,741,190 518,450,352 27% 88%DHS 28,721,993 28,721,993 2% 100%DOT 11,294,370 11,294,370 1% 100%EPA 4,488,479 4,488,479 0% 100%NASA 147,419,493 21,814,164 169,233,657 9% 87%NSF 108,485,789 19,104,502 127,590,291 7% 85%Total 1,682,440,320 224,506,616 1,906,946,936 100%
SBIR % of Total Spent
Amount of Awards 2015Agency % of Total Spent
Grand TotalAgency
DOA1%
DOC1%
DOD40%
ED1%
DOE12%
DHHS27%
DHS2%
DOT1%
EPA0%
NASA9%
NSF7%
* 5 Agencies make up 95.3% of the awarded dollars
InterKn ESCAPE Plan to Applying
Eligibility Suitability Capability Applicability Packability Excitability
Eligibility For-Profit A majority (>50%) of the firm’s equity (ie. Stock, including options)
must be owned and controlled by:1. One or more individuals who are US Citizens or, permanent resident aliens2. Other for-profit small business concerns (13 C.F.R. §121.105)3. A combination of (1) and (2) above4. Multiple venture capital operating companies, hedge funds, private equity
firms, or any combination of these, so long as no one such firm owns or controls more than 50% of the equity
Less than 500 employees for applicant and affiliate companies including:1. Full-time, part-time and other basis2. Temp Leased Employees from Agency3. Based on average for each pay period in previous 12 months
SuitabilityDo you meet the objectives and means of the Agency?
For Research and Development What is the intended product or service? What has been done?
Is it a Technological Innovation How is your proposed solution different from what is
currently available? Is this revolutionary or evolutionary?
Have a credible commercialization strategy Have you identified the market and competitors? Do you have the resources currently or identified to
achieve a product? How do you generate revenue?
CapabilityPrincipal Investigator (PI) or Project
Director (PD)
• Qualified• Employed (W-2) >50% by the small
business at the time of award and for duration of the project
• Legal right to work in U.S.• Devote Majority of time to the
project• STTR Requires ‘official relationship’
and at least 10% LOE (except NSF)
Facility
• U.S. Owned and Located• Dedicated space suitable to
perform the work level of effort
Applicability• What Agency/Agencies fund your Innovation?• What is the Agency’s technologies of interest?• Do they have open solicitations? Match your
capabilities?• What is the timing of their solicitation match our
forecast?• Do they have budget for follow on work?• Do I fully understand their solicitation process?• What are their evaluation criteria?• What are the success rates?
Packability
Principal Investigator
Other Employees
Advisors/Letts of Support
ConsultantSubcontractors
Packability - The TeamConsultants / Subcontractors
* The employment of faculty and students by the small business may also occur.
Letters of Support
• Most agencies allow up to three letters of support.
• Crucial to supporting commercialization strategy and market validity
• What is the biggest factor found between SBIR proposal and award?
Company RI SubKSBIR ≥ 67% - ≤ 33%STTR ≥ 40% ≥ 30% ≤ 30%
Company RI SubKSBIR ≥ 50% - ≤ 50%STTR ≥ 40% ≥ 30% ≤ 30%
Phase I
Phase II
Excitability• Have you submitted pre proposal
feedback or LOI?• Does the Program Manager, Director,
TPOC consider you proposal agency priority? Even applicable or fundable?
• Have they seen your Company/PI before?• Did you speak with them at a conference,
road tour or through a webinar?
STTR InsightPotential Advantages
• Company lack credible PI• No qualified researcher employed• Cannot leave university (tenured)
• Access to Facility or Tools• Lab space/Equipment• Institutional Review Boards (IRB)• Animal Welfare Committees
• Higher % of Subcontract $$$s
• Company and partner must sign intellectual property (IP) agreement
• “Budget and Certification of Research Institution” form required
• Virtual Companies do not qualify• Cognizant of conflict of interest and
future issues down the road with licensing
Collaboration for Non-Profit
ESCAPE plan … Now what… Compliance
Fraud, Waste, and AbuseFraud includes any false representation about a material fact or any intentional deception designed to deprive the United States unlawfully of something of value or to secure from the United States a benefit, privilege, allowance, or consideration to which an individual or business is not entitled.Waste includes extravagant, careless or needless expenditure of Government funds, or the consumption of Government property, that results from deficient practices, systems, controls, or decisions.Abuse includes any intentional or improper use of Government resources, such as misuse of rank, position, or authority or resources.
Know the rules!!
So why SBIR/STTR?Positives
+ Fund “High-Risk” Broad Projects+ Non-Dilutive Funding+ Company Retains IP and Data+ Increased Visibility+ Multiple Awards+ Open Competition+ ~$2 Billion Dollars
Negatives
- National Competition- Limited funding per project- Focus is on R&D- Long proposal timelines- Proposal/Grant Writing Experience- No National Recognition- No guarantee of success
Problems with SBIR/STTR• Lack of consistent information,
disparate, conflicting• Helping with the “Now what” after• Cumbersome and convoluted process• Not well publicized• Support for small business is lacking
In closing…. Be Strategic
Agency
Project
Company
About InterKnMichael Pansky OUR MISSION
To accelerate innovation by delivering non-traditional funding
opportunities to innovative companies and research
institutions
THE PROBLEM
No single tool or service provides a holistic view of what
is important to companies seeking SBIR financing all the way to growth stage funding
Find funding for freeMichael PanskyAt InterKn, we believe finding funding should be easy. That’s why our funding search is simple, intuitive, and most importantly, free. Search a capability, find opportunities, and get funded. Try it yourself at https://www.interkn.com