Julie Collins Georgia Tech/ATDC Primary responsibility help entrepreneurs with applications Also Director of Georgia FAST - provide commercialization and market analytics to minority/women owned and non-metro Atlanta based biz applying to SBIR SBIR/STTR consultant for 6 years primarily looking at NIH and NSF grants. Dozens of NIH grants including reviewer comments.
SBIR stands for Small Business Innovation Research, a grant and contract program that was started by the Small Business Administration in 1982 to fund innovative research and development from our nations small businesses. The program was so successful that in 1992, the Small Business Technology Transfer program was founded to form collaborative efforts between small businesses and research institutions, including federally funded research centers. The program is a set-aside program requiring 11 different agencies to set aside 2.5% of their extramural funding budget (funds appropriated for research outside that particular agency) for the SBIR Program. 5 of these 11 agencies also participate in the STTR Program, which is a mandated 0.3% set-aside
This totals $2.3 Billion in funding per year, making the SBIR/STTR program the largest pool of seed capital available to fund research and development of innovative technologies. This $$, sometimes referred to as “free government” money, is non-equity diluting. Meaning the government will not receive an equity share in your company, nor will it profit from any inventions that are created by these funds. You, and the other inventors, will be the exclusive patent holders.
There are 11 agencies that participate in the SBIR Program -but only 5 that participate in both the SBIR and STTR programs. They fund projects ranging from sensors to vaccines, and bioremediation solutions to educational tools. The common thread - you must be performing Research and Development. The DoD, DHHS and NSF have the largest funds. Each agency runs their own program, and while they all subscribe to the same basic rules, each has it ’s own set of nuances including when their solicitations are released, and how they expect you to account for the use of the funds.
The Program is written as a 2 phased program. Phase I is $150,000 for six to 12 months of work. It is to be used to prove the feasibility of making a technical solution into a commercial product. Phase II is for up to $1M and a 2 to 3 year duration. This phase is for further product development and, in some cases, must result in a working prototype. The National Institutes of Health, part of the Department of Health and Human Services, does fund projects in excess of these standard award amounts, as the cost of biomedical research is exorbitant. Other agencies will make awards for less than this prescribed maximum. You must have a Phase I award to apply for Phase II – you cannot go directly into Phase II - In fact some agencies only allow Phase II applications by invitation only. In addition, some agencies have follow on Phase II b programs to help companies bring their product to the market place and cross the “valley of death”. Many of these programs require matching funds from an investor or partner.
Talk about when to use SBIR/STTR funds Long time until they are awarded Think proactively
SBIR/STTR Reauthorization Summary
SBIR/STTRreauthorization overview Julie Turner Collins ATDC/SBIR GA
SBIR - Small Business Innovation Research 2.5% set-aside STTR - Small Business Technology Transfer 0.3% set-aside
$2.3 BillionFederal seed capital non-equity diluting
AGENCIESSBIR and STTR Participants SBIR Participants Department of Defense* Department of Homeland SecurityDepartment of Health and Human Department of Agriculture Services* Environmental Protection Agency National Aeronautics and Space Department of Transportation Administration Department of Commerce Department of Energy Department of Education National Science Foundation* * FUND MEDICALLY RELATED PRODUCTS
PHASES AWARD SUB- DURATION OBJECTIVE AMOUNT CONTRACT 6 TO 12PHASE I $150,000 Feasibility 33% MOS. 2 TO 3 ProductPHASE II $1,000,000 50% YEARS Development Phase I required Phase II Phase III Note: some agencies allow Phase II applications by request only
STTR• Applicant Small Business Concern• Consortium Agreement 30% required subcontract with RI or FFRDC Max effort 60%• SBC Effort Min 40%, Max 70%
Reauthorization• NDAA FY2012 6 years through 2017• PROCESS Congress Pass Legislation SBA Draft rules/regulations Agencies Implement changes
LEGISLATION• POLICY DIRECTIVE released + effective Aug 6, 2012 changes implemented in 2013 solicitations• SIZE RULES released Dec 27, 2012, effective Jan 28, 2013 changes implement in solicitations released AFTER Jan 28
Size rules effective Jan 28, 2013• OWNERSHIP + CONTROL 50% owned + controlled by: US citizens permanent residents and/or one or more domestic business concerns who are 50% owned and controlled ….
Size rules VC eligibility• VC OWNERSHIP Multiple domestic VCs Each w/ <50% ownership SBIR only• VC Eligibility Organized under U.S. Law Place of business in U.S.• DETERMINED ON A FULLY CONVERTED BASIS
SIZE + AFFILIATION• UNDER 500 EMPLOYEES Including affiliates [Exception:VC-owns minority share]• AFFILIATE DEFINITION: One business [or third party] controls or has the power to control another >50% voting stock OR >40% voting stock IF common management, reliant upon for 70% of receipts, ostensible subcontractors, license agreements (licensee must bear right to profit and risk of loss)
Bottom line “totality of circumstances” AGENCY DISCRETION0-25% CAP [NIH, NSF, DOE] 0-15% CAP all others Who will opt-out?
Policy directive• CCR to SAM transition SBIR to STTR cross over awards Direct to Phase II } @ agency discretion• REGISTRATION WITH SBIR.GOV Why? Track Phase I to Phase II to Phase III conversion• PHASE I = $150,000 PHASE II = $1,000,000 } 150% CAP
NIH Specifics• CURRENT OMNIBUS SOLICITATION } SBIR to STTR Direct to Phase II NO! VC eligibility MID-YEAR RE-RELEASE! SUBSCRIBE• $5,000 TECHNICAL ASSISTANCE Niche assessment or named provider