A Quick Overview of SBIR/STTR

Dr. Fritz GrupeEmail: fritz@unr.edu, or admin@mymajors.com

775-813-7407Made Possible Through

Funding From

Show Me The Money!!!

• 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.

Research Opportunities Reserved for Small Business

2.5%

0.30%

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

business during project

SBIR 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 agreementAllocation of rights in IP and rights to carry out

follow-on R&D and commercialization

STTR Program Eligibility

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

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 $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

Variations

• Fast Track (Phase I and II combined)

• Phase II B (NSF will match 1:1)

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

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

• 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

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

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

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

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*

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

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

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

• 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)

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

SBIR National Conferences

April 21 -23, 2010Hartford, Connecticut

Is it a Good Idea?Is it a Good Idea?

Top 6 Reasons to Seek SBIR / STTR Funding Opportunities

1.1. Over $2.3 Billion available

2.2. NOT A LOANNOT A LOAN - no repayment

3.3. Provides recognition, verificationand visibility

4.4. Fosters partnerships (e.g., large corporations, academia)

Top 6 Reasons to Seek SBIR / STTR Funding Opportunities

6.6. Intellectual property rights arenormally retained by the business

5.5. Provides seed money to fund highrisk projects

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

(almost)

Award ProcessAward Process