SBIR/STTR Introductory
Workshop
Dr. Fritz Grupe
Email: fritz@unr.edu, or
fhgrupe@gmail.com
775-813-7407
Made Possible Through
Funding From
Workshop Agenda
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What are SBIR and STTR?
The phases
Eligibility
Agency differences
What do they pay for?
University participation
Resources you can draw on
Summary of characteristics of successful proposals
Summary of why you might consider applying
Show Me The Money!!!
Why SBIR????
Small Business Innovation Development Act of 1982
Congress designated 4 major goals
• Stimulate technological innovation
• Use small business to meet federal R&D
needs
• Increase private-sector commercialization
innovations derived from federal R&D
Research Opportunities
Reserved for Small Business
• Small Business Innovation Research (SBIR)
2.5%
Set-aside for small businesses to engage in
federal R&D -- with potential for
commercialization. (will be increasing to 3.2%
over 6 yrs.)
• Small Business Technology Transfer (STTR)
Set-aside to facilitate R&D between small
0.30% business concerns and U.S. research
institutions (increasing to .45% over 5 yrs.)
SBIR Program Eligibility
• Organized for- profit U.S. business
• At least 51% U.S.- owned and independently
operated OR at least 51% U.S.-owned and
controlled by another for-profit business
that is at least 51% U.S. owned and
independently operated
• Small business located in the U.S.
• 500 or fewer employees
• P.I.’s primary employment with small
business during project
STTR 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 agreement
– Allocation of rights in IP and rights to carry out
follow-on R&D and commercialization
SBIR/STTR: Critical
Differences
• Research 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
SBIR/STTR: Critical
Differences
• Principal 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
Questions as to Eligibility?
• Contact the SBA size specialists
• Request an eligibility determination
http://www.sba.gov/size/indexcontacts.html
SBIR / STTR Participating
Agencies
TOTAL ~ $2.0
+B
FY 2004
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DOD
HHS
NASA
DOE
NSF
DHS
USDA
DOC
ED
EPA
DOT
SBIR/STTR
SBIR/STTR
SBIR/STTR
SBIR/STTR
SBIR/STTR
SBIR (Dropping)
SBIR
SBIR
SBIR
SBIR
SBIR
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
 $150K+ and 6-month (SBIR)
or 12-month (STTR) Award
PHASE II
 Full research/R&D
 $1M+ and 2-year Award
(SBIR/STTR)
PHASE III
 Commercialization stage
 Use of non-SBIR/STTR funds
Variations
• Fast Track (Phase I and II combined)
• NSF
– Phase IB (1:2 match to $30K)
– Phase IIB (NSF will match 1:3 to $500K)
• Commercialization assistance
– Department of Defense
– National Institutes of Health
– National Science Foundation
– Department of Energy
• Sole source status
• Up to 25% may be made available to larger companies
Another Look at the
Phases
Beyond
SBIR
???????
Phase I
Phase II
Phase III
Phase IV
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?
Proposal
1
Phase I
Phase II
2
3
Years
Source: PCB, Inc.
4
Phase III Funders
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Governmental agencies
Corporations
Venture capitalist firms/individual
Angel investors
Some Facts to Remember
• Eligibility is determined at time of award
• The PI is not required to have a Ph.D.
• The PI is required to have expertise to oversee
project scientifically and technically
• Applications may be submitted to different
agencies for similar work
• Awards may not be accepted from different
agencies for duplicative projects
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
Don’t Judge an Agency’s
Interests by Its “Name ”
FACT: Many research areas of
interest span across agencies
 Avoid inaccurate assumptions about
agency research missions
(e.g., DOT is interested in “safety” NOT “economy”)
 Maximize opportunities for funding by
submitting proposals to as many
relevant agencies as possible
 Identical research
 Complementary research
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
• Granting Agencies
– Agency establishes
plans, protocols and
requirements
– Highly focused topics
– More fiscal
requirements
DOD HHS/NIH
NASA ED
EPA
DOT
DOC
– Investigator initiates
an idea
– Less well-specified
topics
– More flexibility
HHS/NIH
ED
DOE
NSF
USDA
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
Department of Education
Department of Energy
Department of Health & HS
Dept. of Homeland Security (04)
1800
35
200
1030
100
Department of Transportation
20
Environment Prot. Agency
45
NASA
310
National Science Foundation
250
Nuclear Reg. Commission
0
Relative SBIR Agency Sizes
• Dept. of Defense
• National Instit. Health
• National Sci.
Foundation
• Dept. of Energy
• NASA
• All Others
Total
• $1.3 billion
• $680 million
• $161 million
• $154 million
• $130 million
• $82 million
$2.5 billion
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…..
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Contact individual agency websites
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Cross-agency website:
http://www.sbir.gov
 Conferences / workshops
 Topic search engine for all agencies
 Partnering Opportunities
 State Newsletters
www.SBIR.gov
SBA Technet
http://tech-net.sba.gov/technet/public/dsp_search.cfm
Other Helpful Sites
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www.sba.gov/sbir
www.zyn.com/sbir
www.pbcinc.com
http://www.sbtdc.org/pdf/sbir_handbook.pd
f (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.
Firm Size Distribution*
*FY01 Phase I DOD Award Winners
Advice from Awardees
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Don’t judge an agency’s interests by
its “name ”
Understand agency’s mission and
needs
Get to know your agency program
manager
Read solicitation and follow
instructions
Advice from Awardees
 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
Proposal Framework
Significance
Market
Purpose
Problem
Commercial
Potential
(Phase III)
Solution
Innovation
Approach
Tech.Objectives
Work
Budget
Plan
Capability
Team
Facilities
Legend for Criteria
o Scientific/Technical Approach
o Ability to Carry out Project
o Impact
Courtesy Dr. Robert Berger, former
Department of Energy SBIR-STTR Program
Manager and MS-FAST Consultant
http://books.lulu.com/content/106258
Commercialization
Planning
• For most agencies, you determine the
customer, define the market
• For DoD and NASA, perhaps others, the
agency is the customer, ultimate user
– Usually down to program level
– Procurement channels often complex
• For DoD, “commercialization” means
“transition”
Intellectual Property
• To retain rights to IP, the company:
– Must report invention to the agency within 2 months
– Elect rights within 2 years
– File application within 1 year
• US Gov. may “march in” if contractor fails to report or elect, or if
it is not commercialized, or for health/safety reasons
• Must be substantially manufactured in U.S. (waivers possible)
• A recent court case (Stanford v. Roche) emphasized the need
for all organizations to be clear on employee/consultant
contracts (ex. If a university employee is on loan to a company,
to whom does an invention belong?)
University-Business
Partnership 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
University and Industry:
Two Different Cultures
Industry researchers
are from MARS
University researchers
are from Venus
Getting Help With STTR
1. Federal Laboratory Consortium
http://www.federallabs.org/
See Technology Locator
2. University technology transfer officer
(if there is one)
3. Techmatch
http://www.dodtechmatch.com/DOD/inde
x.aspx
NV Tech Transfer People
• Richard Bjur, UNR/DRI, Special Asst To VP
Graduate School Ms 0321, Reno, Nevada
89557, (775) 784-4116, bjur@unr.edu
• Elda Luna Sidhu, Assist. General Counsel
UNLV, 4505 Maryland Parkway, Box 451085,
Las Vegas, Nevada 89154-1085, Ph: (702)
895-5185, elda.sidhu@unlv.edu
NSBDC’s SBIR Assistance:
• Enhancing communication with agencies
– Possible future agency representatives in the state
– There are some local contacts
• Agency Searches
• Guidance and assistance
• Reactions to proposals
• Location of potential partners
• Location of local proposal writers
• Suggestion of alternative funding sources
such as EPSCOR, MAP, etc.
http://nsbdc.org/how-we-canhelp/technology_innovation/
http://nsbdc.org/how-we-canhelp/technology_innovation/
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Funding, Marketing, Patenting, Etc
Sample Proposals
Links To Search Engines
Past Award Winners
Nevada University Research Centers
SBIR National Conferences
November 2012
Portland, OR
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
Levels of Review
• Administrative - Does the proposal meet
formating and other technical requirements (1015% are rejected)
• Manager – Is it a reasonable submission,
responsive, etc.
• Panel/merit review – How does it compare to the
other proposals
• Agency selection – How many from each area
will be funded?
DOD FORMAT
(1) Identification and Significance of the
Problem or Opportunity
(2) Phase I Technical Objectives
(3) Phase I Work Plan
(4) Related Work
(5) Relationship with Future Research or
Research and Development
State the anticipated results of the proposed
approach if the project is successful
Discuss the significance of the Phase I effort in
providing a foundation for Phase II research
(6) Commercialization Strategy
(7) Key Personnel
(8) Facilities/Equipment
(9) Subcontractors/Consultants
Lack of experience with essential
methodologies
 Unrealistically large amount of work
proposed
 Over budget, over page limit, incorrect
format
 P.I. credentials weak, weak team
 Milestones not detailed
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From Here
• Keep up on solicitations for new topics
• Keep your innovation current
• Keep looking for people and companies to
help
• Decide whether you have to rely on SBIR
for funding
Get Help From Others
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Incubator/Accelerator Executives
Centers of Innovation
National Laboratories
Small Business Development Centers
Non-competitive Small Business
Innovation Research Program Awardees
Top Reasons to Seek Funding
• $2.5 Billion Available
• Not a loan or an investment – no
repayment
• Provides recognition and validation
• Fosters partnerships
• Seed money funds risky projects
• IP stays with the company
• Offers an advantaged sole source position
The Challenge
(From the SBIR Coach, Fred Patterson)
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The game is very competitive
The rules are hard to interpret
Good proposals are hard to write
Proposals are somewhat objective
Agency priorities trump your ideas
The money doesn’t flow quickly
Subject to scrutiny, audits, etc.
Otto Rohwedder’s Path to
Commercialization
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Milestones:
1912 Otto Rohwedder toys with the idea of producing a machine to
slice bread
1916 Rohwedder begins to design a machine to slice bread
1917 fire destroys his factory, prototype machine and the blueprints
1926 Toastmaster begins selling pop-up toasters
1927 Rohwedder finally saves enough money to begin again to build a
bread slicer
1928 Rohwedder files patent application for a single step bread slicing
machine
1928 forms a company Mac-Roh Sales & Manufacturing to build and
sell the bread slicer machine
1928 first mechanical pre-sliced bread goes on sale to the public in
Chillicothe, Missouri
1929 St. Louis, Missouri baker, Gustav Papendick, adds
improvements to Rohwedder's machine.
1930 Wonder Bread begins selling pre-sliced bread, most bakeries
follow suit
1932 toaster sales skyrocketed, thanks to the standardized size of
sliced bread
1933 American bakeries were turning out more sliced than unsliced
bread
1933 Rohwedder sells patent rights to and goes to work for MicroWestco, Inc.
1934 Patent 1,970,379 issued August 14, 1934 for Slicing Machine
assigned to Papendick, Inc.
sliced bread, bread slicer, bread slicing and wrapping machine,
toaster, Otto Rohwedder, Gustav Papendick, M. Frank Bench, wonder
bread, invention, history, inventor of, history of, who invented,
invention of, fascinating facts.
Award Process
Congratulations!
The check is “in the mail…”
(almost)