SBIR 101 by InterKn - Everything you need to know about America's Seed Fund
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Are you developing innovative technology? Are you looking for funding for your R&D? Are you interested in pursuing an SBIR or STTR opportunity but aren't sure where to start? You've come to the right place! At InterKn, our mission is to educate entrepreneurs and researchers about alternative innovation funding. In this short presentation, we discuss everything you need to know about the SBIR Program and how you can use it to fund your project past proof-of-concept and on to a commercially viable product! For more free information on innovation funding resources, visit us at https://www.interkn.com.
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SBIR 101 by InterKn - Everything you need to know about America's Seed Fund
- 1. Presented by Go to https://www.interkn.com for more free innovation funding information.
- 2. 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
- 3. What are the SBIR and STTR Programs? Approximately $2 Billion in Federal Funding that: Supports Small Businesses Stimulates Technology Innovation Commercializes Products
- 4. Small Business R&D, 0.06% of the Federal Budget The Federal Budget Galaxy
- 5. 88%, SBIR 12%, STTR Small Business R&D, 0.06% of the Federal Budget
- 6. 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.
- 7. 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
- 8. Goal of the SBIR/STTR Programs (Not an alternative to funding basic research) Valley of Death Idea Product
- 9. Goal of Traditional Seed Financing Isn’t that the same image? What’s the difference between the two? Valley of Death Idea Product
- 10. VC and Traditional Funding Debt Financing Traditional Funding Dollars Payback Diluted Equity Equity Financing
- 11. SBIR/STTR Funding Federal Agencies SBIR/STTR Award Dollars Payback Diluted Equity Federal Budget
- 12. History of the SBIR Program
- 13. 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)
- 14. 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 • Eligibility Translates 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
- 15. 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
- 16. Granting vs. Contracts Agencies National 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
- 17. Three Phased Program Phase 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%
- 18. Product Lifecycle Structure and Reducing RiskRisk ProductLifecycle Phase I Phase II Phase III Idea Proof of Concept Prototype Product Customers Prelim Data Feasibility Product Development Commercialization
- 19. Alternative and Supplemental Programs Phase I Phase II Phase III Phase IB Program Provides additional Phase I dollars Fast Track Program Apply for Phase I & II Simultaneously Phase IIB Program Provides additional Phase II dollars Direct to Phase II Bypass Phase I Commercialization Readiness Programs Continued funding to build business and marketing strategy * Agency Specific, not all have these programs
- 20. 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.
- 21. Is your entity eligible for this money? • Individual Proprietor • Partnership • Limited Liability Corporation (LLCs) • Corporations (C, S) • Joint Venture • Association • Trust • Cooperative
- 22. 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 2015 Agency % of Total Spent Grand Total AgencyDOA 1% DOC 1% DOD 40% ED 1%DOE 12% DHHS 27% DHS 1% DOT 1% EPA 0% NASA 9% NSF 7% * 5 Agencies make up 95.3% of the awarded dollars
- 23. InterKn ESCAPE Plan to Applying Eligibility Suitability Capability Applicability Packability Excitability
- 24. 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 aliens 2. Other for-profit small business concerns (13 C.F.R. §121.105) 3. A combination of (1) and (2) above 4. 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 basis 2. Temp Leased Employees from Agency 3. Based on average for each pay period in previous 12 months
- 25. Suitability Do 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?
- 26. Capability Principal 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
- 27. 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?
- 29. Packability - The Team Consultants / 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 SubK SBIR ≥ 67% - ≤ 33% STTR ≥ 40% ≥ 30% ≤ 30% Company RI SubK SBIR ≥ 50% - ≤ 50% STTR ≥ 40% ≥ 30% ≤ 30% Phase I Phase II
- 30. 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?
- 31. STTR Insight Potential 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
- 32. ESCAPE plan … Now what… Compliance Fraud, Waste, and Abuse Fraud 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!!
- 33. 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
- 34. 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
- 35. In closing…. Be Strategic Agency Project Company
- 36. About InterKn Michael 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
- 37. Find funding for free Michael Pansky At 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