National Science Foundation
Industrial Innovation Funding
F. C. Thomas Allnutt
Division of Industrial Partnerships & Innovation
Vermont June 2008 - overview
The NSF Mission
 To
promote the progress of science
and engineering
 To
advance the national health,
prosperity, and welfare
 To
secure the national defense
NSF is…
National Science Board
Director
Staff Offices
Office of Polar
Programs
IG Office
Directorate for
Biological
Sciences
Directorate for
Computer and
Information
Science and
Engineering
Directorate for
Geosciences
Directorate for
Engineering
Industrial
Innovation and
Partnerships
(IIP)
Directorate for
Education and
Human
Resources
Directorate for
Mathematical
and Physical
Sciences
Directorate for
Social,
Behavioral,
and Economic
Sciences
Integrative
Activities
(MRI, STC)
Division of Industrial Innovation
and Partnerships (IIP)
 Link
basic research to the
marketplace
 Cross-cutting programs
–
–
–
–
SBIR
STTR
I/UCRC (Industry University Cooperative
Research Centers)
PFI (Partnerships for Innovation)
SBIR & STTR Programs
 2.5%
 0.3
of NSF budget SBIR
% of NSF budget STTR
 Goal
is to move science from the
bench to the marketplace
Bridging the “Valley of Death”
Prototypes
Small Business
Tech Development
Business
Development
Seed Funding
NSF SBIR
Business
Startups;
Expansions
Research
and Education
-Univ.
-R&D Labs
Participating Agencies

TOTAL ~ $2.3B
Est. FY 2008
DOD
 HHS
 NASA
 DOE
 NSF
 DHS
 USDA
 DOC
 EPA
 DOT
 DoED
Defense
Health
Space
Energy
~$110 Million
Homeland Security
Agriculture
Commerce
Environment
Transportation
Education
NSF SBIR/STTR Innovation Model
Phase I B
Third-Party
Investment +
1:2 NSF
Matching
PHASE I
Feasibility
Research
$100k/6 mos
Unique
to NSF
Phase IIB
Third-Party
Investment +
1:2 NSF
Matching
Private Sector or
Non-SBIR
Investment
MATCH
MAKER
PHASE II
Research
towards
Prototype
$500k/24 mos
PHASE III
Product
Development to
Commercial
Market
Taxes
Federal
Investment
Doing Business with NSF

NSF is not the Final Customer

NSF is not buying a product, process,
software, or intellectual property

NSF wants to see the grantee successfully
commercialize the innovation

Company needs investment dollars beyond
NSF SBIR/STTR
SBIR/STTR Reviews
 Technical
–
–
Review
Technical Merit
Broader Impact
 Commercial
–
–
–
–
Review
Team
Market Opportunity
Technology, IP, and Competition
Financial Plan
Remember the Supplements!
http://www.nsf.gov/eng/sbir/phase_iib.jsp
http://www.nsf.gov/eng/iip/sbir/supplemental_requests.jsp

IB – Gap Funding
–

IIA – Minority Partnership
–

Max $500K (1:2) match for third party funds
IICC – Leverage of Community College
–

Max $150K partnership with a CREST institute to delve
deeper into the technology 30:70 (grantee : institute)
IIB – Third-Party Leverage
–

Max $50K (1:2) match for third party funds
Max $40K partnership with a MSCC institute to delve
deeper into the technology 25:75 (grantee : institute)
REU/RET – Increased Human Capital
IIB Supplement
 Supplemental
Research
to Phase II
 Bridge the gap between
Phase II and Phase III
 Third-Party match
required
 Third-Party can be
Private, State, or Federal
NSF/SBIR Phase IIB Success
2004
2005
2006
Outside Investment
$10.6 M
$43.5 M
$57.8 M
NSF Leverging Funding
$5.3 M
$14.1 M
$18.4 M
# of Companies
22
44
49
Companies with >$1M
Investment
4
23
29
16%
52%
59%
% (>1M / Total)
Takeaway

Many SBIR/STTR programs out there!

At NSF ~$110M/year granted primarily for seedstage 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
Questions??
Useful Links:
www.sbir.gov (SBIR Resource/gov run)
www.zyn.com/sbir/ (SBIR Gateway)
www.nsf.gov/eng/iip/sbir/ (NSF SBIR homepage)
Contact info:
Tom Allnutt
email: tallnutt@nsf.gov
phone: 703-292-5332
IB Supplement
 Bridge
gap between Phase I & Phase II
 Foster partnerships with investors and
attract third party funding
 Maximum award $50,000 based on a
third party investment of $100,000
IIA Supplement
- Minority Partnership
 Consistent
with the SBIR Legislation
– encourage minority participation
 Opportunity to further enhance the
science and engineering research
underlying the SBIR technology
 Phase IIA is a supplement to an active
Phase II grant
Phase IIA Minority Partnership
(continued)

Requires a Phase II grantee to partner with a
CREST/RISE grantee:
http://www.nsf.gov/pubs/2005/nsf05/nsf0520.
pdf

Budget not to exceed $150, 000
– SBIR portion <30%
– CREST/RISE portion >70%
Phase IIB Review

Reviewed in-house
 Submission must be within original 24
month award period
 Reviewed by at least two NSF Program
Officers
 Two Criteria
 Award recommendations within 90 days
from the two closing dates of
September 1, 2006 and March 1, 2007
 Minimum $100,000 total Third-Party
investment (s)
Phase IIB Information

NSF will match 50% of the funds
received

Overall total (Phase II & Phase IIB)
cannot exceed $1,000,000

Payment schedule (50% with the
supplemental award, 50% with the
submission and approval of 6 month
interim report)

Extends Phase II grant by one (or two)
year (s)
IIB Third-Party Funds Can
Come From . . .
 Another
company
 Venture capital firm
 Individual “angel” investor
 State Government
 Local Government
 Non-SBIR Federal Government
 Any combination of the above
MatchMaker
Phase III
Goal - Link Early Stage Investors and
Strategic Corporate Partners with
Qualified Phase II Grantees
MatchMaker “Value-Added”

NSF Program Officers have done “due
diligence” on companies

Because of NSF Program selectivity
Corporate Partners will receive targeted
matches

Through MatchMaker Corporate Partners
will be locked into Future opportunities
MatchMaker – Grantee Criteria

Definitive plan to protect intellectual
property

Consent to NSF SBIR to provide reference
for company

Phase II proposal ended 5 years ago or
less

Good standing within the SBIR program
MatchMaker Connection
 Mailbox
(SBIRmatch@nsf.gov) was
created to allow potential investors and
PI’s to register
 Program
Manager matches their PI’s
with potential investors and makes the
introduction
 MatchMaker
Coordinator manages the
mailbox and maintains the database