National Science FoundationNational Science Foundation

SBIR/STTR ProgramSBIR/STTR Program

F. C. Thomas AllnuttF. C. Thomas Allnutt

Division of Industrial Partnerships & InnovationDivision of Industrial Partnerships & Innovation

Vermont June 2008 – Grant Writing

Bridging the “Valley of Death”Bridging the “Valley of Death”

Research and Education-Univ.-R&D Labs

PrototypesSmall Business Tech Development

BusinessDevelopment

Seed Funding

BusinessStartups; Expansions

NSF SBIR

DODDOD DefenseDefense HHSHHS HealthHealth NASANASA SpaceSpace DOEDOE EnergyEnergy NSFNSF ~$110 Million~$110 Million DHSDHS Homeland SecurityHomeland Security USDAUSDA AgricultureAgriculture DOCDOC CommerceCommerce EPAEPA EnvironmentEnvironment DOTDOT TransportationTransportation DoEDDoED EducationEducation

Participating AgenciesParticipating Agencies

TOTAL ~ $2.3BTOTAL ~ $2.3B Est. FY 2008Est. FY 2008

NSF SBIR/STTR Innovation ModelNSF SBIR/STTR Innovation Model

PHASE IIIPHASE IIIProductProduct

Development toDevelopment toCommercialCommercial

MarketMarket

PHASE IPHASE IFeasibilityFeasibilityResearchResearch

$100k/6 mos$100k/6 mos

TaxesTaxesFederal Federal

InvestmentInvestment

PHASE IIPHASE IIResearchResearchtowardstowards

PrototypePrototype$500k/24 mos$500k/24 mos

MATCHMAKER

Phase IIBPhase IIBThird-PartyThird-Party

Investment + Investment + 1:2 NSF 1:2 NSF

MatchingMatching

Private Sector or Private Sector or Non-SBIR Non-SBIR InvestmentInvestment

Unique Unique to NSFto NSF

Phase I BPhase I BThird-PartyThird-Party

Investment + Investment + 1:2 NSF 1:2 NSF

MatchingMatching

Phase I - Solicitation TopicsPhase I - Solicitation Topics 2 Solicitations released per calendar year, typically:

– Sept. for Dec. closing– March for June closing

Each Solicitation will offer 1 or more topics that represent:– Investment/business-focused technologies– Market-driven technologies– Special topics in response to National needs

Keep a watch on the topic offerings of the current solicitation for opportunities most relevant to you

New Developments!New Developments!Current solicitation is only SBIRThree topics:

• Bio/Chemical Technologies (BC)• Software & Systems (SS)• Electronics, Components, and Engineering

Systems (EL)June 10th and Dec 4th DeadlinesSTTR will be a separate solicitation

NSF is not the Final Customer NSF is not buying a product, process,

software, or intellectual property NSF wants to see the grantee successfully

commercializecommercialize the innovation Company needs investment dollars beyond

NSF SBIR/STTR

Doing Business with NSFDoing Business with NSF

Commercialization Analysis Commercialization Analysis Phase II NSF ProjectsPhase II NSF Projects

The Data– Success rate ~ 40% for 240 projects (multi-year analysis) – Success criteria – product sales I year after completion and $1

MM sales after 6 years Risks– Market Failures > Technology Failures– 50% more likely to fail based on Market ForcesImportance of Partnerships– ~60% of successful projects have a “strategic partnership” – ~30% close university tie – Phase IIB funding: 75% success rate (vs. 31% without)

Key TakeawaysKey Takeaways

Market risks > Technical risksPartnerships and External Financing

are Critical indicators of successPartnerships take time

Most Proposals Fail BecauseMost Proposals Fail Because Lack of identified opportunity (science projects) Lack of perceived technology risk Lack of clarity (e.g. poor work plan) Other issues

– IP ownership and landscape– No clear technology advantage– Competitive landscape– Path/Time to market– Distraction to the company mission

Didn’t read the directions

TakeawayTakeaway Many SBIR/STTR programs out there! At NSF ~$100M/year granted primarily for seed-

stage development in… – Software & Systems (SS)– Biotechnology & Chemical Technologies (BC) – Electronics (EL)

Program to mitigate technical risk and bridge the “Valley of Death”

Investment in Country’s Innovation Capacity

Useful Links: www.sbir.gov (SBIR Resource/gov run)(SBIR Resource/gov run)

www.zyn.com/sbir/ (SBIR Gateway)(SBIR Gateway)

www.nsf.gov/eng/iip/sbir/ (NSF SBIR homepage)(NSF SBIR homepage)

Contact infoContact info::Tom AllnuttTom Allnutt

email: email: tallnutt@nsf.govphone: 703-292-5332phone: 703-292-5332

Questions??

BC. Bio/Chemical TechnologiesBC. Bio/Chemical Technologies A.1 Agricultural Biotechnology: Such applications include but are

not limited to pathogen and toxin diagnostics, genetic engineering, methods to reduce the use of fertilizer and/or increase efficiency of plant nutrient assimilation.

A.2 Food Biotechnology: Such applications include but are not limited to real-time methods for detection of pathogens and toxins in the food, novel tracking methods, improved sterilization methods.

A.3 Environmental Biotechnology: Such applications include but are not limited to methods to reduce human ecological and environmental impacts, microbial contamination sensing and control, removal of toxic compounds for human and animal safety, point of use water treatment, midstream wastewater treatment technologies, treatment of runoff, environmental compatibility and sustainability, pathogen and toxin diagnostics, control of exotic diseases, nanobiotechnology solutions, and water treatment.

A.4 Marine and Aquatic Biotechnology: Such applications include but are not limited to improved or novel marine species hatchery technologies, replacement of marine sourced materials in feeds, disease control, diagnostics, vaccines, alternative technologies, sensors and biosensors; marine environment extremophilic enzymes for extreme temperatures.

NSF Merit Review ProcessNSF Merit Review Process NSF Merit Review

– Typically reviewed by panel meetings– Panelists from Academe, Investment Community,

Industry– Confidential with signed CDAs by panel

Phase I – all proposals receive a minimum of 3 reviews & both technical and commercial review

Phase II – 3 reviews & both technical and in depth commercial review

SBIR/STTR ReviewsSBIR/STTR ReviewsTechnical Review

– Technical Merit– Broader Impact

Commercial Review– Team– Market Opportunity– Technology, IP, and Competition– Financial Plan

Why does NSF care about Why does NSF care about commercializationcommercialization??

What is the NSF Vision?

What is the NSF SBIR/STTR Vision?

“…catalyze the strong progress in science and engineering needed to establish world leadership and secure the Nation’s security, prosperity, and well being”

To be the pre-eminent federal resource to leverage high technology through small businesses to stimulate our nation’s innovation leadership and contribute to the U.S. economy and society

Commercial Review GuidanceCommercial Review GuidanceRevenue and Finance Plan Does the company demonstrate adequate

knowledge for the level of financial resources it will take to get the innovation to market?

Does there appear to be a plan to bring reasonable resources to bear to get this innovation to market?

Competitive Proposal - HintsCompetitive Proposal - Hints Answer the right question The right question

– Not Can it be done but Should it be done Communicate with the Program Manager Prepare an Executive Summary for the

Communication– Team– Market Opportunity– Technology– Competition

Listen to the Feedback

Doing Business with NSF (cont.)Doing Business with NSF (cont.)

Ideas do NOT equal business opportunities Do your HOMEWORK, describe the

opportunity– Remember the time component to value of

money Get some market validation BEFORE you

come to NSF SBIR/STTR Consider proposal as ADVOCATE at the

table Proposal as “selling” document

Intellectual Merit Does the proposal reflect state-of-the-art in the

major research activities proposed? Is the proposed plan a sound approach for

establishing technical and commercial feasibility?

How well qualified is the team (the PI, other key staff, consultants, and subawardees)?

Is there sufficient access to resources (materials, supplies, analytical services, equipment, facilities, etc.)?

Technology Review GuidanceTechnology Review Guidance

Broader Impact What may be the commercial and societal benefits of the

proposed activity? Does the proposal lead to enabling technologies

(instrumentation, software, etc.) for further discoveries? Does the outcome of the proposed activity lead to a marketable

product or process? Evaluate the competitive advantage of this technology vs.

alternate technologies that can meet the same market needs. How well is the proposed activity positioned to attract funding

from non-SBIR sources once the SBIR project ends?

Technology Review GuidanceTechnology Review Guidance

Commercial Review GuidanceCommercial Review GuidanceCompany/Team Based on the information in the proposal, is this is a

seed, early stage or expanding company? How well is the team poised to take this innovation

to market? Have they taken similar products to market

previously? Do they have additional outside advisors, mentors,

partners and stakeholders? Is the corporate structure consistent with the

company’s stage and vision?

Product/Technology and CompetitionHas the company described the features of their product or

service that are going to provide a compelling value proposition to the customer?

What validation is there from the market about the proposed value proposition?

Does the company demonstrate knowledge of the competitive landscape?

How is this company going to compete: price, performance or other?

Does the company appear to understand issues regarding IP? Is there adequate evidence that the company knows its position

in the IP landscape?Does there appear to be a management plan for handling IP

issues as they arise?

Commercial Review Guidance (continued):Commercial Review Guidance (continued):