SBIR & STTR Grants Non-dilutive Funding of Research for Small Businesses

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SBIR & STTR Grants –

Non-dilutive Funding of Research for

Small Businesses

June 25, 2014

@UC Irvine School of Medicine (Orange)

Molly B. Schmid, Ph.D.

Senior Counselor, TriTech SBDC

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Presentation Outline

• Characteristics of SBIR/STTR grants

• Preparing to apply for an SBIR/STTR grant

– Do you qualify for SBIR/STTR Award?

– Preparing the SBIR/STTR Proposal

• Who is the Principal Investigator

• How likely is it that you will receive an SBIR award if you submit a

proposal?

• TriTech SBIR Counseling services

– How TriTech can help

• Ideas for being an academic and starting a company

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Why Academics Should Care about SBIR/STTR Grants

• If you are interested in starting a company or have an

existing company

• If your students are interested in starting a company

around your research interests

• Many similarities in “grantsmanship” between

SBIR/STTR proposals and other types of proposals to

support research

• NON-dilutive funding (you retain equity)

• Typically no matching fund requirement for Phase I, II

grants

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4/10/2013

CHARACTERISTICS OF SBIR/STTR

GRANTS

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Characteristics of SBIR/STTR grants

• 12 federal agencies administer SBIR/STTR programs

• Only US-based small business are eligible

• SBIR solicitations require description of commercial

applications

– Government can be customer (e.g., military, biodefense)

• Small businesses eligible for MANY other federal

grants

– SBIR/STTR funds reserved for small businesses

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Characteristics of SBIR/STTR grants

• SBIR – Small Business Innovative Research

• STTR – Small-business Technology Transfer –

– Collaboration required between university & small business

– PI can be university researcher

• Grants in phases

– Phase I – typically technical proof of principal/concept

• Amounts vary, 6-12 mo’s, $75-150K common

– Phase II – complete research, development

• Amounts vary, 24 mo’s, $750K- 1.5MM common

– Phase III – commercialization

• Typically unfunded, though there may be non-cash, in-kind aid to

commercialization activities

• Small businesses eligible for MANY other federal grants,

but SBIR/STTR reserved for only small businesses

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Federal Agencies with SBIR Programs

In 2012, the following federal agencies had SBIR programs:

• Department of Agriculture

• Department of Commerce -

National Institute of Standards and Technology

• Department of Commerce -

National Oceanic and Atmospheric Administration

• Department of Defense

• Department of Education

• Department of Energy

• Department of Health and Human Services

• Department of Homeland Security

• Department of Transportation

• Environmental Protection Agency

• National Aeronautics and Space Administration

• National Science Foundation

Each agency manages its SBIR/STTR programs

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4/10/2013

PREPARING TO APPLY FOR AN

SBIR/STTR GRANT

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Do You Qualify for SBIR/STTR Award?

• Company structure, ownership

– Organized, For- profit, U.S.-based business

– Ownership – changing requirements

• Past: At least 51% U.S.- owned by individuals (this precluded companies

majority owned by venture funds)

• To come soon: Agency-by-agency implementation allowing some companies

with majority fund ownership. Check specifics of funding opportunity

– 500 employees or fewer including affiliates

• PI’s primary employment with the small business

– At the time of award and for the duration of the project period

– STTR can have academic PI (but there must be 51% employee of

business)

• Proposed work must occur in US

– Exceptionally difficult/impossible to overcome this

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Preparing the SBIR/STTR Proposal - cont’d -

• Identify SBIR/STTR funding opportunities –

www.sbir.gov

– Aggregates all agencies

• Non-SBIR/STTR funding opportunities

http://www.grants.gov/applicants/find_grant_opportunit

ies.jsp

• Identify specific solicitation(s)

– Deadlines for Letter of Intent, Pre-application if required

– All details needed to prepare proposals are provided in specific

solicitations

• Often 50-100 pgs, sometimes 2 or more separate documents

• Register on electronic submission systems

– This may take 6-8 weeks!

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Characteristics of SBIR/STTR Awards

Agency > DoD NASA DoT EPA DoE DHS

DoC-NOAA

DoC-NIST NSF USDA DoED NIH Award Type (Contract,

Grant) C C C C G C C C G G G/C G/C

Max. Award Amount

Phase I 150Ka 125K SBIR/ 100K STTR 150K 80K 150K 100K 95K 90K 150K 70-100K 70-100K 150Kb Time of Phase I 6 mo 6 mo/ (12 mo STTR) 6 mo 6 mo 9 mo 6 Mo 6 mo 6 mo 6 mo/ (12 mo STTR) 8 mo 6 mo 6 mo Award Amount Phase

II 1MM 750K 1MM 300K 1MM 750K 300-400K 300K 500K 450K 500K 1MM Time of Phase II 24 mo 24 mo 24 mo 24 mo 24 mo 24 mo 24 mo 24 mo 24 mo 24 mo 24 mo 24 mo Review Process I I I I E I I I E E I E Research Topics S S S S S S S S B B S B Gap Funding Y N N N Y N N N Y Y N Y Communication R R R R R R R R O O O O

Recent Success rates

(Ph I, 2010) 16% 22% 9% 7% 14% 17% 8% 18% 17% 14% 20%

(Ph II, 2010) 73% 50% 70% 61% 33% 67% 41% 29% 62% 23% 41%

Avg mo's - Phase I proposal deadline and

start of award 5.8 4.9 4.2 9 7.1 4 6.3 6.1 6.5 9.5 7.6 9.9

a_varies

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Characteristics of SBIR/STTR Awards

DoC-NOAA

Max. Award Amount

(Ph I, 2010) 16% 22% 9% 7% 14% 17% 8% 18% 17% 14% 20%

(Ph II, 2010) 73% 50% 70% 61% 33% 67% 41% 29% 62% 23% 41%

start of award 5.8 4.9 4.2 9 7.1 4 6.3 6.1 6.5 9.5 7.6 9.9

a_varies

This is an overview - Always check the specific agency solicitation!

SOME AGENCIES - CONTRACTS

OTHER AGENCIES - GRANTS

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Characteristics of SBIR/STTR Awards

DoC-NOAA

Max. Award Amount

(Ph I, 2010) 16% 22% 9% 7% 14% 17% 8% 18% 17% 14% 20%

(Ph II, 2010) 73% 50% 70% 61% 33% 67% 41% 29% 62% 23% 41%

start of award 5.8 4.9 4.2 9 7.1 4 6.3 6.1 6.5 9.5 7.6 9.9

a_varies

This is an overview - Always check the specific agency solicitation!

PHASED STRUCTURE

PHASE I – 6-9 MONTHS, $100-150K – proof of

concept

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Characteristics of SBIR/STTR Awards

DoC-NOAA

Max. Award Amount

(Ph I, 2010) 16% 22% 9% 7% 14% 17% 8% 18% 17% 14% 20%

(Ph II, 2010) 73% 50% 70% 61% 33% 67% 41% 29% 62% 23% 41%

start of award 5.8 4.9 4.2 9 7.1 4 6.3 6.1 6.5 9.5 7.6 9.9

a_varies

This is an overview - Always check the specific agency solicitation!

SOME AGENCIES – SPECIFIC TOPICS (DOD)

OTHER AGENCIES – BROAD TOPICS (NIH)

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Preparing the SBIR/STTR Proposal

• Identify proposal PI

– SBIR – must be employed 51% by small business

– Proposal is technical

– Reviewers need evidence that PI will be good project leader for proposed activities

• Who will guide technical activities, decisions, manage technical staff?

– In my experience (NIH)

• Over-extended CEO sometimes receives criticism

• MBA-CEO without technical credentials often receives criticism

– Strong proposal will overcome this

– Consider STTR mechanism, where academic can be co-PI

– Intent to be with company throughout grant period

• Who will write proposal?

– Technical document

– 6-25pg research plan

– Budget

• Company must submit the proposal (not the university)

– Company must register in electronic submission systems

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Check the Details - NIH

• SBIR and STTR Omnibus Solicitations

– Defines scope (broad), institutes (all), eligibility, deadlines

(standard deadlines: Apr 5, Aug 5, Dec 5; <AIDS different>)

• Not all NIH Institutes will fund clinical trials through

SBIR or STTR Omnibus Solicitations

– NO: NIAID, NINDS

– YES: NIMH, NCCAM

• Special FOA’s for SBIR-funded Exploratory Clinical

Trials

• http://grants.nih.gov/grants/funding/sbirsttr1/2014-2_SBIR-STTR-topics.pdf

• http://grants.nih.gov/grants/guide/pa-files/PA-14-071.html

• http://grants.nih.gov/grants/guide/pa-files/PA-14-072.html

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How likely is it that you will receive an SBIR

award if they submit a proposal?

DoC-NOAA

DoC-NIST NSF USDA DoED NIH

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(Ph I, 2010) 16% 22% 9% 7% 14% 17% 8% 18% 17% 14% 20%

(Ph II, 2010) 73% 50% 70% 61% 33% 67% 41% 29% 62% 23% 41%

• Resubmissions often allowed, and often higher % success than average

• Talking with agency personnel often helps understand competitiveness,

especially with agencies that solicit Specific (rather than Broad) Research

topics

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Activities to Help Your Success

• Take advantage (or make) opportunities to talk with

people in the relevant federal agency(s)

– Especially important for agencies that solicit applications for

specific research topics

• Take advantage of opportunities to attend SBIR/STTR

workshops

• Frequent reference to SOLICITATION when writing

– Format, etc MUST be correct

– Criteria for evaluation – make information easy for reviewer to

find, understand

• Plan ahead!

– First-time grant writers should start at least 1 month in advance,

set aside sufficient time (100h)

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4/10/2013

TRITECH, OCTANE, CONNECT –

ORGANIZATIONS THAT CAN HELP!

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TriTech SBDC

• TriTech Small Business Development Center

– Orange County, Inland Empire geographic area

– Serving high potential early-stage companies

• Counselors to help small companies grow

– Experienced C-level business people

– Wide range of technical expertise

• Services designed to help early-stage companies

– Identify funding sources

– Identify professional service providers that are

entrepreneur-friendly (lawyers, accountants, etc)

– Identify

• All free of charge to the entrepreneur!

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TriTech SBIR/STTR Counseling Services

• What we can do

• Strategize how to break down projects into Phase I, II

• Inform on administrative issues

• Edit, feedback, counsel on the written proposal

• What we can’t do

• Write the proposal

–

PI is responsible for the work

–

Technical nature of proposal requires knowledgeable PI to write the

scientific background, workplan, commercialization, budget

–

Options exist for outside grant writers (costs will vary, $5-10

+

K)

»

Why do you want this option? (“Intimidated” – good answer; “Too

busy” – less good answer)

• Perform the administrative tasks

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Advice from Awardees*

• Don’t judge an agency’s interests by its “name ”

• Understand agency’s mission & needs

• Get to know your agency Program Manager

• Read solicitation and follow instructions

• Don’t depend solely on SBIR funding

• Don’t go it alone - use support systems

• Have an outcome

• Win or lose - get and review evaluations

• Be PERSISTENT

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For Information & Advice

• Online

–

www.sbir.gov

– NIH and other agency websites –

• Information about application & review processes

• Guides to better grant writing

• In person

– TriTech

www.tritechSBDC.org

– OCTANe

www.octaneoc.org

– CONNECT

www.connect.org

• There is no reason to do it alone!

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4/10/2013

MOLLY B. SCHMID, PH.D.

CONTACT INFO

TriTech Consulting:

www.TritechSBDC.org

mbschmid@verizon.net

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Characteristics of SBIR/STTR Awards

DoC-NOAA

Max. Award Amount

(Ph I, 2010) 16% 22% 9% 7% 14% 17% 8% 18% 17% 14% 20%

(Ph II, 2010) 73% 50% 70% 61% 33% 67% 41% 29% 62% 23% 41%

start of award 5.8 4.9 4.2 9 7.1 4 6.3 6.1 6.5 9.5 7.6 9.9

a_varies